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| Life Insurance |
Life insurance is designed to provide valuable peace of mind, but you must have heard of instances where payments are denied. Here's our guide to avoiding failed claims.
1. Premiums weren't even up to date
Often, life insurance claims are dismissed simply because the policy has expired – usually because of a lack of payment. Life insurance works on the premise that premiums are paid regularly (the policyholder may have opted for weekly, fortnightly or monthly billing). If the payments were not up-to-date at the time of the death of the policyholder, it may affect the validity of the cover, resulting in no payouts. Encourage the policyholder to set up automatic payments to cover their premiums to avoid this situation from arising.
2. The insurance policy had expired
Term life insurance is designed to cover the policyholder for a specific period. Once this period has elapsed, the policy is no longer valid, which means the policyholder needs to renew, extend or choose a different type of insurance. A life insurance policy that has exceeded its term is not eligible for payouts, so make sure the policyholder is aware of any conditions attached to its cover.
3. Cause of Death was not covered by the policy
When you sign up for life insurance, the Product Disclosure Statement includes all the terms and conditions associated with that policy. Here, you will see that some causes of death are not covered by life insurance. Often, these include deaths due to certain extreme sports, or those occurring in countries that the Australian government has advised against travel. Some policies do not even cover certain pre-existing diseases.
TAL Life Insurance offers a number of additional covers that can help ensure that your beneficiaries receive payments. It also includes:
Accident cover, which ensures that you are covered in case of unforeseen events like car accidents.
Illness cover, which covers diseases like cancer, neurological or heart disease and also includes terminal illness cover which can pay your lump sum amount in less than 12 months.
Adventure sport cover, which ensures that your policy will be valid if you die in an accident caused by an adventure sport such as scuba diving or paragliding.
As with all insurance policies, including any additions, you should always read the terms and conditions to make sure you understand what is and is not covered. This will help you and your family avoid any unpleasant surprises later on.
4. Death occurs due to suicide within the first 13 months of the cover Most life insurance policies will include a suicide clause in their policies. This means they will not cover death by suicide within a stipulated period at the inception of the policy. With TAL policies, suicide is not covered within 13 months after the cover is withdrawn or benefits increased. If you or someone you love has been affected by suicide, call Lifeline on 13 11 14 for further assistance.
5. Policyholder did not disclose information about existing health conditions
When you apply for health insurance, you often have many questions about your occupation, health and lifestyle, including any pre-existing conditions you may have. It is always important to be honest in answering these questions. If you die due to an existing condition that was not disclosed to your insurer, your claim may be denied and your life insurance policy may be cancelled.