What Does Life Insurance Cover?
A life insurance policy pays a lump sum benefit in case of death or diagnosis of a terminal illness. This type of policy offers financial peace of mind, knowing you have secured your finances. You or your beneficiaries will have access to financial support to cover medical bills, maintain your family’s lifestyle, or fund the family’s future goals.
Typically, individuals take out a life insurance policy for its:
Death Cover
When the insured passes away, whether through an illness or an accident.
Terminal Illness Cover
When the insured is diagnosed with a terminal illness, such as cancer, and has less than 12 months to live. The period may vary depending on the insurer.
Life Insurance Claims Process
It is important to know that the life insurance claims process may vary per insurer. The guide below is a standard process that our team follows.
Below is our simple 7-step claim process:
Step 1: Contact your insurance provider and obtain the claims package
Contact the insurance provider and inform them of your intent to lodge a claim. Generally, the insurer will need basic information, such as:
Once provided, the insurer will send the claims package and their process.
Step 2: Check claim eligibility
If available, review your loved one’s life insurance policy to determine your eligibility to process a claim. For life insurance claims, below are the common factors that insurers normally pre-screen:
Policy validity
The policy premiums are paid and up to date.
Coverage period
Check if the insured’s age is within the policy’s coverage period.
Reason for claim
Typically, most insurers have stringent requirements for suicide cases.
Step 3: Gather medical evidence and documents
If processing individually, this step will require you to be extremely persistent and organized. Gathering all medical evidence, such as the death certificate, medical report from a doctor, or any other documents that will support your claim, is crucial.
Step 4: Write a supporting letter
Writing a supporting letter for your claim application is not mandatory. However, a supporting letter can help your insurer understand your claim and add authenticity.
A typical supporting letter usually has:
- Basic personal details and policy information, such as policy number and effectivity date
- Description of the reason for a claim
- How does it satisfy the eligibility requirement of the policy
- A polite request for a prompt and fair assessment of your claim
Step 5: Complete claim forms and submission
Ensure that you have filled out the forms correctly, supplied all the necessary documents, and that you are sending it to the correct recipient. Refer to the insurer’s guide on submission and document all communications with them for future reference.
Step 6: Follow up with the insurer
It is typical for insurers to take some time with their decision, usually within a few weeks to months. However, during a prolonged evaluation time, you may reach out to your insurer for follow-up.
Step 7: Be persistent if the claim gets denied
When your claim is declined, do not lose hope. Most rejected claims are due to misinterpretation of documents or application forms–and insurers’ decisions are not always final.
In Australia, every individual has the right to appeal the insurer’s decision.
Step 8: (Bonus) What to do after payment of the claim
Getting approval and having access to the benefits of your loved one’s life insurance is not the final step. Many approved life insurance claims go to waste due to the inability to manage the fund properly—keeping the family in financial trouble.
If you work with Curo, you can also take advantage of our financial planning service. We can help you:
- Create a sound cash flow plan to make sure your basic needs are covered
- Maximise the benefits with tax-efficient strategies
- Build a savings plan for your family’s future
