The Dollar Value of Life Insurance Claims

The defining moment for any insurance company is when it is time to pay a claim. At Tower, they believe in assessing all claims fairly, professionally and in a timely manner (see acceleratedprotection.com.au for details).

Our own research indicates that when it comes to the insurance industry, people are sometimes sceptical in regards to claims. Lifebroker surveyed over 1000 adults for the Lifebroker Research Report, February 2010. Thoughts and attitudes towards life insurance were recorded and amongst that, some interesting findings emerged. 67% of respondents said they agreed (strongly/somewhat) with the proposition that insurance companies tend to use loop holes to avoid payouts.

The fact is, insurance companies would not still be around if they didn’t pay claims. If the companies were not paying out claims it would be known and people would not continue to take out insurance with them. 

Between 1st July 2008 – 30th June 2009 Tower paid claims to the value of $360 million.

The following information which shows the claims paid by Tower in this time period.

• Life & TPD: $204 million
• Critical Illness/Trauma: $78 million
• Income Protection: $78 million*
• Total: $360 million

We have spoken to Howard Williams (Claims) from AIA, on his thoughts on claims payouts from AIA, “at AIA, we try to find a way to pay claims as quickly and transparently as possible.  Between September 2009 and September 2010 we declined less than 2% of all claims submitted”

In regards to the 2% of claims, which were denied, 80% of them were in regards to Trauma Insurance benefits that did not meet very specific definitions.

Majority of the insurer’s will tell you - if you apply honestly, clearly stating your full medical and occupational history in the application process, as well as make your monthly (or yearly) payments on your premiums, you will not have anything to worry about, come claim time.

*This figure includes claims paid for Business Expenses.