Do Life Insurers Really Pay Claims?
Insurers often get a bad wrap for doing their best to avoid paying claims. But you might be surprised to hear that life insurers only decline a small percentage of claims.
Do life insurers really pay claims?
There’s a common perception that life insurance companies will do everything they can to avoid paying claims.
In fact, 92% of all life insurance claims are paid in the first instance¹.
As long as you fulfil your duty of disclosure when you apply for cover, and you’re covered for the medical condition you’re claiming for, you should be confident your claim will be paid.
Will I still be covered if my health changes?
Once you start your cover, what you are covered under your life insurance for won’t change – even if your health deteriorates.
In fact, you don’t even need to tell your insurer about a change in your health unless you intend to make a claim.
Why are some claims declined?
The main reasons life insurers decline a small percentage of claims are:
claims outside the policy definitions
claims are specifically excluded from the customer’s policy (e.g. due to pre-existing medical conditions)
non-disclosure of a pre-existing medical condition. In this case, the insurer will generally take into account what that condition was, what cover they would’ve offered if they knew about that condition and whether that condition is related to the claim.
fraudulent claims.
GENERAL ADVICE WARNING
The advice contained within this document does not consider any person’s particular objectives, needs or financial situation. Before making a decision regarding the acquisition or disposal of a Financial Product, persons should assess whether the advice is appropriate to their objectives, needs or financial situation. Persons may wish to make their assessment themselves or seek the help of an adviser. No responsibility is taken for persons acting on the information within this document. Persons doing so, do so at their own risk. Before acquiring a financial product, a person should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product.