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Take care when ap­ply­ing for in­sur­ance

Know your med­i­cal notes Don’t take no for an an­swer at claims time

ASIC, the Aus­tralian Se­cu­ri­ties and In­vest­ment Com­mis­sion.

New Zealan­ders de­serve no less, but there’s no­body push­ing for it.

In­ci­den­tally, I didn’t make that 31 per cent fig­ure up.

Prompted by aw­ful claims against one in­surer (Com­mIn­sure owned by Com­mon­wealth Bank of Aus­tralia), ASIC’s re­view found there were in­sur­ers you re­ally did not want to be with.

It found 90 per cent of claims were paid in the first in­stance, and just 4 per cent of life in­sur­ance claims were de­clined.

But it also found 16 per cent of to­tal and per­ma­nent dis­abil­ity in­sur­ance claims, and 14 per cent of trauma in­sur­ance claims were de­clined.

Three dis­abil­ity in­sur­ers had de­cline rates of 37 per cent, 25 per cent and 24 per cent.

For trauma, one had 31 per cent, an­other 25 per cent and an­other 21 per cent.

Those lev­els are morally dis­grace­ful.

ASIC didn’t re­veal the names of the in­sur­ers with the high­est de­cline rates. In­sur­ers re­viewed in­cluded AIA In­sur­ance, Onepath Life, Sun­corp Life, AMPLife, West­pac Life, Al­lianz Aus­tralia Life and Sun­corp.

We don’t know Kiwi in­sur­ers’ claims de­cline rates.

But all those Aus­tralian com­pa­nies have sis­ter op­er­a­tions here, and Com­mIn­sure owner CBA also owns Sov­er­eign.

Why so many de­clines?

Some poli­cies have re­stric­tive def­i­ni­tions, for ex­am­ple, trauma poli­cies which turn out not to cover some heart at­tacks.

Peo­ple fail to tell the in­surer some­thing when ap­ply­ing for in­sur­ance, for ex­am­ple, not re­al­is­ing a mi­nor health event 10 years ago was a ‘‘pre-ex­ist­ing con­di­tion’’ the in­surer could later use to de­cline a claim.

An in­surer de­cides it doesn’t have to pay, when in fact, it should. Let’s char­i­ta­bly call those mis­takes.

ASIC also found peo­ple who bought in­sur­ance through ad­vis­ers were less likely to have claims de­clined.

Hope­fully, once the Aussie pub­lic gets its data, New Zealand will fol­low. Un­til then, it’s buyer be­ware, only with­out the in­for­ma­tion buy­ers need to do so.

It might be time to read your pol­icy, get a copy of your ap­pli­ca­tion, and med­i­cal notes, and ask your in­surer to check you have dis­closed ev­ery­thing.


We need to know whether our in­sur­ers are heav­enly to deal with at claims time, or hellish.

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