The claim, in order
Moneysmart’s page on making a life insurance claim covers income protection, and its steps run like this.
Start with whoever sold the policy
Moneysmart says to speak to the person or company you bought the policy from, to ask how the claims process works and which forms are needed, and to have the policy number ready. For cover held in super, its page on early access says you may be able to claim while you cannot work for a period, with cover and conditions set by the policy.
Ask for help if you need it
If you are struggling physically or emotionally, Moneysmart suggests asking a trusted friend or family member to help with the process.
Medical evidence
The insurer may ask your permission to contact your doctor, and you may have to attend an independent medical examination with a specialist who reports to the insurer.
Ongoing assessments
If illness or injury keeps affecting your ability to earn an income, you may need regular assessments and progress claim forms.
Urgent financial help during a claim
Moneysmart’s page has a section on asking for urgent financial help while a claim is assessed. It says you will need documents that support the need, such as bank statements or Centrelink statements, and that payments for urgent help may reduce the claim payout.
A mortgage can be part of the picture. Moneysmart’s page on problems paying a mortgage notes that someone behind on repayments because of accident or sickness may have income protection that can cover them, possibly through super.
Finding the insurer behind the cover
To find which insurer provides a policy, Moneysmart points to the product disclosure statement (PDS), the super fund or a financial adviser. Its claims comparison tool draws on data that life insurers and friendly societies report to APRA, and one of its measures is disputes per 100,000 lives insured, counting disputes about a claim lodged with the insurer, an external dispute resolution scheme, a court or a tribunal.
How long it may take
| Stage | Timeframe | Whose words |
|---|---|---|
| Initial decision on an income protection claim | Within 2 months; within 6 months for all other types of life insurance | Moneysmart, describing the Financial Services Council’s Life Insurance Code of Practice |
| Decision on an income-related claim | Within 2 months of being notified, or 2 months after the waiting period has expired, depending on the circumstances | Moneysmart, on making a life insurance claim |
| Acknowledging a complaint | ASIC expects acknowledgement within 24 hours (or one business day), or as soon as practicable | ASIC, Regulatory Guide 271.51 |
| A financial firm’s IDR response to a complaint | No later than 30 calendar days after receiving it; RG 271 sets different timeframes for some kinds of complaint | ASIC, Regulatory Guide 271.56 |
Moneysmart says the Life Insurance Code of Practice sets out what insurers should do in handling a claim, including timeframes for decisions and for keeping you updated, and that if they fall short you can complain to the insurer. Its claims comparison tool reports insurers’ average claim times, which cover how long an insurer takes to accept or decline a claim and leave out any time a super fund trustee takes; depending on the cover, the whole claim can take significantly longer.
From a complaint to AFCA
1. The insurer or the fund
Moneysmart says to complain to the insurer or super fund about the claim as soon as you can. A formal complaint in writing to a business is what Moneysmart calls internal dispute resolution (IDR). Under ASIC’s RG 271, though, a consumer does not have to use the word “complaint” or “dispute”, or write it down, for a firm’s IDR obligations to apply. RG 271’s standards apply to complaints received on or after 5 October 2021.
For insurance in super, RG 271 says the complaint may go to the insurer or the trustee, and that trustees, insurers and administrators must have arrangements to meet the maximum IDR timeframe wherever it was first lodged.
2. AFCA
If no agreement is reached, Moneysmart says AFCA offers free, independent dispute resolution. ASIC’s RG 271 says financial firms must have a dispute resolution system made up of an IDR procedure meeting ASIC’s standards and membership of AFCA.
Moneysmart says financial services businesses all belong to an external dispute resolution (EDR) scheme, and that the scheme hears complaints for free. Moneysmart notes that a complaint to AFCA can be made online. AFCA’s own site is afca.org.au.
Moneysmart warns that leaving out important details when applying can lead an insurer to change or cancel the cover or refuse a claim. The guide on what follows if something was not disclosed reads them in order, and the duty when you apply sets out section 20B.