Making a life insurance claim, life insurance can be best described as a contract between an individual and an insurance company. In exchange for your premium payments, the insurance company will pay a lump sum of money which is known as a death benefit to your beneficiaries after you pass away.
Your beneficiaries are then able to use the money for whatever they wish to spend it on. Common ways the money is used includes; paying everyday bills, putting your child through college or paying a mortgage.
There are two types of life insurance. Term and permanent life. Permanent insurance provides you with lifetime protection, while term life offers for a certain period of time.
To make a claim on your insurance, speak to the person or company you bought the policy from.
If you bought insurance through:
- an insurer — contact the insurance company
- an insurance broker or financial adviser — speak to them first
- a superannuation fund — contact your fund
- an employment arrangement — speak to your employer
Ask the person you bought insurance to how the claims process works and what forms you will be required to fill out. Make sure you have your policy number available. If you are struggling physically or emotionally, ask a trusted friend or family member for help with the claims process.
What Information Are You Required to Provide?
Making a life insurance claim, the insurer will ask for information to support your claim. Depending on the type of insurance, you might have to provide:
- medical reports and medical test results from your doctor
- details of your work duties, including physical requirements, and the number of hours you work each week
- payslips and tax returns, or financial statements if you are self employed
- if a person has passed away, a death certificate or medical report listing the cause of death
Your insurer might ask you for permission to contact your doctor about your claim. You may also have to go to an independent medical examination with a specialist, who then reports to the insurer.
If illness or injury continues to affect your ability to earn an income, you may need to have regular assessments and complete progress claim forms.
How Long Will the Claims Process Usually Take?
Depending on each individual living situation, an insurer will let you know their decision for:
Income-related claims will usually take 2 months of being notified about your claim to be processed, or 2 months after the waiting period has expired
Other claims usually will be processed within 6 months of being notified about your claim, or 6 months after the waiting period has expired.
Urgent Financial Help
If you require immediate financial help while a claim is being assessed, speak to the insurer or super fund. They will consider your circumstances and may be able to speed up the assessment and decision about the claim or they might be able to make a payment for you in advance.
You will need to provide your insurer with documents that support your need for urgent financial help. These could include copies of your bank statements or your Centrelink statements. Payments for urgent financial help may reduce your claim payout.