Over the course of an average person’s working life they will pay thousands of dollars to their Superannuation fund in various forms of life insurance to protect themselves and their families in case of serious injury or death. Unfortunately, when tragedy strikes many people find their claims denied and can be left in a devastating financial position.
Last week, the Australian Securities and Investments Commission (ASIC) revealed that claims for total and permanent disablement (TPD) have an average rejection rate of around 16%. However there were some insurers that had significantly higher denial rates than the average, with three denying claims at rates as high as a shocking 37%.
ASIC was instructed to perform a review on the life insurance sector following a significant amount of media coverage earlier this year surrounding the life insurance arm of the Commonwealth Bank, Comminsure. The review has found that in some cases claims are denied on technicalities or grounds which are not in the ‘spirit’ of the policy.
ASIC has recommended that the government strengthen the legal framework surrounding claims handling and will work with the Australian Prudential Regulation Authority (AHPRA) to establish a public reporting framework for life insurance claims and outcomes. This will hopefully increase transparency and provide consumers with greater knowledge when taking out life insurance policies. There will also be a “targeted follow up” on insurers with above average rates of denied claims.
In response, the Financial Services Council, who represent insurers, released a life insurance code of conduct to address some of ASIC’s concerns. Unfortunately, this self-regulating code excludes insurance policies which are provided within super funds and make up the majority of the market. Therefore, theoretically at least, insurers are not bound by this code when it comes to life insurance claims made through superannuation.
Whilst a step in the right direction, it appears that ASIC’s review does not go far enough in protecting consumer’s rights. Therefore until the Federal Government steps in to strengthen the framework for consumers, many people with legitimate claims will be left to fight for benefits which they are entitled to.
In situations such as these it is vital to have a strong legal team behind you. At Turner Freeman Lawyers we specialise in all types of disability and life insurance claims. We have assisted many hard-working people to gain access to their lawful entitlements and pride ourselves on our ability to achieve justice for our clients.
We can assist you from the initial lodging of a claim and will fight for your rights until the claim is completed, taking the matter to Court if necessary, and we will act on a No Win, No Fee basis. Our expert knowledge means that we have the skill and ability to navigate through any potential obstacles up to the approval of your claim. This will ensure you are able to access your benefits as quickly as possible.
If you believe that you are entitled to any form of superannuation, insurance or disability payment call 13 43 63 to speak with one of our experts or accredited specialists in New South Wales.