We tend to think about insurance when we first put it in place but rarely think about what happens if we actually need to use it.
One of the questions I’m often asked is whether life insurance really pays when something goes wrong.
The reassuring answer is that the vast majority of claims are paid. For advised clients, 97.2% of life insurance claims were paid between July 2024 and June 2025.
But there’s another important part of the story: making sure the cover you have still reflects your life today.
Your income, debts, family responsibilities and lifestyle can all change over time. And insurance that was appropriate five or ten years ago may not necessarily be the right fit now.
Understanding how claims work and reviewing your cover before you ever need to make one, can give you confidence that the protection you’ve put in place will do what you expect it to do.
Why most claims are paid
When you apply for life insurance, you’ll usually be asked questions about your health, lifestyle, occupation and medical history. This helps your insurer understand your circumstances and determine the terms of your cover. If you need to claim, your insurer will assess your claim against the terms of your policy and the information you provided when you applied for cover. If the claim meets the policy conditions, it will generally be paid. That’s why it’s important to be open and accurate when applying for cover and to review your insurance from time to time to ensure it continues to meet your needs.
When claims aren’t accepted
While most claims are accepted, some aren’t.
Some common reasons include:
- Important information wasn’t disclosed when the person applied for cover
- The event they’re claiming for isn’t covered by the policy
- An exclusion applies
- The policy was cancelled because the person stopped paying their premiums
What happens when you make a claim?
While every claim is different, the process is usually straightforward. You’ll lodge your claim and provide any supporting information that’s needed, which may include medical reports, financial information or other documents. Your insurer will then review the information and assess it against your policy. There are also rules around how quickly insurers need to respond. If they need more information or there are delays, they must keep you updated.
How do insurers make sure claims are handled fairly?
Life insurers operate in a highly regulated industry and must follow strict standards when handling claims. Insurers must abide by the Life Insurance Code of Practice, which sets expectations around communication, transparency and customer support throughout the claims process. There are also formal pathways available to have a decision reviewed if you disagree with the outcome.
How can you make claiming easier?
There are a few simple things you can do at the outset to help avoid complications later:
- Be honest and accurate when you apply for cover
- Review your cover to ensure it meets your needs
- Keep your contact and beneficiary details up to date
- Make sure you pay your premiums on time
Final thought
Life insurance does what it’s designed to do: provide financial support when you or your loved ones need it most. Understanding the claims process and keeping your policy details current helps ensure it works smoothly for you, particularly if you should ever need to claim. Get in touch if you’d like to discuss your protection options.
Our team are ready to help you plan for when you need it, book a chat, so we can give you clarity and confidence moving forward.
References:
https://moneysmart.gov.au/how-life-insurance-works/life-insurance-claims-comparison-tool
https://lifeccc.org.au/resources/life-insurance-code-of-practice-1-1-july-2017-30-june-2023/
