Why advised clients are better off when it comes to claim time

Alex Burke,  Senior Writer,  No More Practice Education

In a piece of research described by both regulators as "world-leading," APRA and ASIC have jointly outlined the life insurance claims and disputes statistics for the 12-month period from 1 January 2018 to 31 December 2018.

The statistics were derived from entity-level claims and disputes data for APRA-licensed life insurers, excluding reinsurers.

In detail, the findings are, by relevant types of cover:

  • Death admittance rates: 96% (individual advised), 88% (individual non-advised), 98% (group super) and 99% (group ordinary)
  • TPD admittance rates: 87% (individual advised), 59% (individual non-advised), 88% (group super) and 68% (group ordinary)
  • Trauma admittance rates: 87% (individual advised), 87% (individual non-advised) and 100% (group ordinary)
  • Disability income insurance admittance rates: 95% (individual advised), 85% (individual non-advised), 96% (group super) and 95% (group ordinary)

 

The claims paid ratio (that is, the dollar amount of claims paid out as a percentage of annual premiums receivable) was also generally higher for advised claimants – 39% for death cover versus 32% for non-advised claimants, 45% for TPD cover versus 28% for non-advised claimants and 62% for trauma cover versus 40% of non-advised claimants.

In general, the research reflects that advised claimants are altogether better off at claim time than their non-advised counterparts. ASIC’s Life insurance claims comparison tool is a valuable means of demonstrating these findings out in the community.


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.

 

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