Personal insurance: Claims process

Written and accurate as at: 15 February 2022

For many of us, personal insurances can be a key risk-management strategy worth considering. It’s a plan B in the event of an unexpected passing, disabling sickness or injury, or traumatic event.

Notably, the probability of claiming* on an insurance policy by age 65 is 28% for males and 23% for females. In the unfortunate event this was to occur, you may find this overwhelming during an already difficult time.

In this animation, we illustrate the claims process. Also, below are some recent statistics on claims in Australia^:

  • Average claims processing duration, across all distribution channels: life, 1.2 months; TPD, 5.6 months; trauma, 1.5 months; and income protection, 2 months.
  • Average of claims that received a decline outcome, across all distribution channels: life, 3%; TPD, 12%; trauma, 14%, income protection, 5%.
  • Main reasons for a claim receiving a decline outcome, across all distribution channels: contractual definition not met, exclusion clause, unintentional nondisclosure or misrepresentation, and fraudulent claim.

*Iress, Risk Researcher. (2022). Life risk calculator: Probability of 30-year-old claiming on a life, TPD, or trauma policy by age 65.

^APRA. (2021). Life Insurance Claims and Disputes Statistics: June 2021.