Advised life insurance admittance rate above 80%

According to the Australian Prudential Regulation Authority’s (APRA) latest Life Insurance Claims and Disputes Statistics publication, which covers a rolling 12-month period from 1 January 2023 to 31 December 2023, life insurers received 3,419 death claims within the individual advised category.

The data presents the key industry and entity-level claims and disputes outcomes for 17 Australian life insurers writing direct business.

APRA reported that, among the 3,419 death claims, the average sum insured was $533,000.

The data also showed that 85.9 per cent of the claims were finalised, with 97.4 per cent admitted and 2.6 per cent declined, with those finalised for an average sum insured of $509,000.

There were also 2 per cent of claims withdrawn and 12.1 per cent undetermined.

In the individual non-advised category, 90.7 per cent of finalised claims were admitted, while 98.3 per cent of finalised group insurance claims through superannuation were admitted.

Looking at total and permanent disability (TPD), there were 2,995 claims for an average sum insured of $762,000, however, just 55.4 per cent of the TPD claims had been finalised.

Among those finalised, 83 per cent were admitted and 17 per cent were declined.

In contrast, individual non-advised TPD claims that had been finalised had an admittance rate of 78.5 per cent. Super group insurance admittance for finalised TPD claims was the highest at 92.5 per cent.

The largest difference among the categories is in the average sum insured, with individual advised coming in significantly higher and likely impacting the likelihood of admittance.

While death cover had an average sum insured of $533,000 for individual advised, this figure was $256,000 for individual non-advised and just $136,000 for group insurance through super.

Similarly, the $762,000 figure for individual advised TPD cover, individual non-advised TPD was $424,000 and just $151,000 for group insurance through super.

The trauma category for individual advised cover saw 4,979 claims with an average sum insured of $264,000. Of the 89.8 per cent of finalised claims, 86.6 per cent were admitted and 13.4 per cent were declined.

There was also 9,474 disability income insurance (DII) claims at an average sum insured of $8,000 per month. Among these claims, 85.8 per cent were finalised, with 95.2 per cent admitted and 4.8 per cent declined.