Largest claims for death cover
The life insurance industry paid $12 billion to 101,821 Australians in 2019, with death cover having the most cover in force at 13.4 million with the top cause being cancer at 43%, according to data.
Data from KPMG on behalf of the Financial Services Council (FSC) found total and permanent disability (TPD) claims followed at 11.1 million covers, with the highest cause of claim being mental health at 25%.
Income protection/disability income had 5.8 million covers in force with 33% for accidents, and trauma insurance had 1.1 million covers in force with cancer being the highest cause at 58%.
FSC senior policy manager for life insurance, Nick Kirwan, said: “Life insurance companies pay out almost $33 million to 279 Australians and their families every single day, 365 days a year.
“Payments are made to people who have lost a partner, a parent or a loved one, or to help people support themselves and their family when they are too ill to work, after a critical illness or who are not expected to be able to work ever again.
“When we see the collective data, and especially the many and varied causes of claim and just how often they occur, it reveals the scale of the human tragedies that Australians and their families can, and all too often do, go through.”
LIFE INSURANCE CLAIMS DATA FOR 2019
|
Life Insurance Pays a lump sum on your death or the diagnosis of a terminal illness. |
13.4 million covers in force |
|
|
Number of claims paid |
Acceptance rate |
Amount paid ($m) |
|
19,974 |
97% paid |
$3,644 |
|
Top 5 causes of claim |
% of total claims paid |
Amount paid ($m) |
|
Cancer |
43% |
1,580.7 |
|
Accident |
17% |
630.9 |
|
Circulatory System |
14% |
507.2 |
|
Abnormal Clinical Findings |
10% |
379.6 |
|
Nervous System |
3% |
121.6 |
|
Total and Permanent Disability (TPD) Insurance Pays you a lump sum if you are not expected to work ever again due to illness or injury. |
11.1 million covers in force |
|
|
Number of claims paid |
Acceptance rate |
Amount paid ($m) |
|
17,266 |
90% paid |
2,579 |
|
Top 5 causes of claim |
% of total claims paid |
Amount paid ($m) |
|
Mental Disorders |
25% |
649.2 |
|
Musculoskeletal System |
22% |
575.4 |
|
Accident |
15% |
374.2 |
|
Nervous System |
12% |
311.5 |
|
Cancer |
9% |
240.3 |
|
Income Protection (IP) / Disability Income (DI) Insurance Pays you an income after an initial waiting period if you are not well enough to work due to illness or injury. |
5.8 million covers in force |
|
|
Number of claims paid |
Acceptance rate |
Amount paid ($m) |
|
37,465 |
95% paid |
$4,342 |
|
Top 5 causes of claim |
% of total claims paid |
Amount paid ($m) |
|
Accident |
33% |
1,450.4 |
|
Cancer |
14% |
595.1 |
|
Mental Disorders |
14% |
594.4 |
|
Musculoskeletal System |
13% |
554.1 |
|
Circulatory System |
9% |
370.7 |
|
Trauma insurance / Critical Illness Insurance Pays you a lump sum on diagnosis of a specified critical illness. |
1.1 million covers in force |
|
|
Number of claims paid |
Acceptance rate |
Amount paid ($m) |
|
5,159 |
86% paid |
$1,056 |
|
Top 5 causes of claim |
% of total claims paid |
Amount paid ($m) |
|
Cancer |
58% |
609.2 |
|
Circulatory System |
24% |
249.2 |
|
Nervous System |
5% |
58.1 |
|
Accident |
3% |
30.3 |
|
Abnormal Clinical Findings |
2% |
17.2 |
.
|
Whole Market |
Life, TPD, IP, Trauma, Funeral, Accident, and CC Insurance |
34.9 million covers in force |
|
Period of Report |
Number of claims paid |
Amount paid ($m) |
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Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
