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Claims by Advised Clients Generally More Likely to Succeed

APRA’s latest life insurance claims and disputes statistics publication appears to reinforce that advised clients are more likely to be paid for death, TPD and Disability Income (Income Protection) claims.

APRA’s data on the admittance rate by cover type and channel for the 12 months to June 2020 shows that individual adviser cover for death was paid 96% of the time compared with 89% for individual non advised.

Advised cover is when a client obtains their insurance from a fully qualified financial adviser. Non advised cover is for insurance cover that is taken out within super, over the phone or internet with a direct insurer such as Real Insurance or through another avenue that does not involve a financial adviser. These statistics reinforce the need to take out fully underwritten cover through a financial adviser.

APRA also reported that advised TPD claims were 81% paid compared with 61% for non advised claims.

For Disability Income (Income Protection) advised clients recorded 94% compared to 85% for non advised clients.

A statement from APRA says the data is the product of a ”world leading” joint project between the authority and ASIC, aimed at making it easier to compare life insurers performance in handling claims and disputes.

In it’s executive summary to the full report APRA notes that generally, individual advised business shows higher admittance rates than individual non-advised for the same type of cover.

Another point for clients to consider is the potential cost of claim assistance. Generally clients who have a retail insurance policy through a financial adviser will receive claims assistance for free. Clients who have cover through their super or through a direct insurer may need to engage the services of a Lawyer to help with the claims which erodes the amount of cover payable should the claim be successful.


*The information within is general advice only, prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs

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