6 Points to Take from the Latest Life Insurance Claims Reports
July 26, 2022

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Key Life Insurance Claims Findings

Have you’ve ever wondered how important having a Life Insurance policy may be for you?

TAL and AIA’s latest stats on Life Insurance claims might convince you the investment is worth it…

Wealth Smart partners and Life Insurance providers TAL and AIA have recently released their own findings on their own Life Insurance claims – and what they’ve found might not be what you expected.

An AIA March 2015 advisers’ report has revealed that AIA paid out almost $900 million in claims in 2014. TAL has also stated it supplied almost $950 million last year. That’s nearly an average of $4 million for every working day.

And you’ve got a pretty high chance your claim will be accepted. Here’s a startling statistic:

Last year AIA approved 92.9% of its claims.

Here are just a few more salient points from their data:

#1. Life Insurance can help you, no matter your profession

The AIA and TAL reports prove Life Insurance may be important for everyone. No matter your income or professional position; people from all walks of life benefited from insurance claims last year.

That’s right.

Among AIA’s successful claimants in 2014 were tradies, managers, doctors, accountants, hairdressers, architects, scientists, executives, and many more.

#2. There is no such thing as too young or too old

We often think age is everything when it comes to Life Insurance; we think it’s critical at certain life points and irrelevant at others.

But Life Insurance matters just as much for younger adults or those entering retirement.

AIA’s youngest and oldest insurance claimants in 2014 attest to that:

  • Oldest Death Cover claimant – 76 years old
  • Youngest Death Cover claimant – 15 years old
  • Oldest Trauma Cover claimant – 68 years old
  • Youngest Trauma Cover claimant – 25 years old

In fact, TAL found that 49.6% of Life Cover claims were made by those over 65 years of age. And just over 50% of Total and Permanent Disability claimants were 56 to 65 years old.

But other types of Life Insurance can be more important to youthAlmost 25% of TAL’s Income Protection claims came from those under 35 years of age.

Ever thought of cancelling your Trauma policy?

On average, people typically took out a Trauma policy in their late 30s only to cancel it at 42.5 years of age – even though most claims occur at 50 years old.

Find out how one of our clients was affected by her policy cancellation.

#3. Cancer is a leading cause of Death Cover and Trauma claims

This one might not be such a surprise, but we still thought it was worth emphasising:

Cancer is prevalent in Australia – it remains one of the leading causes of death here. It was also the reason for most Death and Trauma claims AIA paid out in 2014.

It was especially responsible for female Death Cover claims: 54% of female death claims were a result of cancer. And 13% of all female Death claims were because of breast cancer.

Cancer was the number one cause of Trauma claims for both genders too. It made up 65% of all male Trauma claims and 81% of all female claims (of which 45% came from breast cancer).

#4. Women lagged behind men on claims

All TAL’s results showed women lagged behind men on all types of Life Insurance claims:

Male Female
 Life Cover  58.7%  41.3%
 TPD Cover  59.2%  40.8%
 Trauma Cover  52.9%  47.1%
Income Protection  70.7% 29.3%

Income Protection proves the most shocking statistic:

Fewer than 30% of all Income Protection claims were made by women, even though women made up 45.6% of the total workforce in April 2014.

Read more on how women lag behind men in every area of Life Insurance here.

#5. Musculoskeletal conditions are the primary cause of TPD claims

While cancer was the leading cause of Death and Trauma claims in 2014, the majority of TPD and Income Protection claims came from musculoskeletal conditions.

Musculoskeletal conditions involve bone, muscle and joint problems and include osteoarthritis, rheumatoid arthritis, osteoporosis, back pain, fractures, and injuries.

All these conditions can inhibit your ability to work – and that’s where TPD and Income Protection insurance come in handy, giving you the time off to recuperate without losing your income.

AIA found that 40% of all TPD claims AND 40% of all Income Protection claims were attributed to musculoskeletal conditions in 2014.

#6. Your insurance can cover mental health

Mental problems, including depression and anxiety, have been rising in Australia. So it can be a comfort to know your Life Insurance policy covers mental health (but pay attention: some policies exclude mental health).

In fact, according to AIA’s latest stats, mental health was the second biggest cause of Income Protection claims and was one of the top 5 reasons behind TPD claims in 2014.

Last year a 53 year old manager received a TPD benefit from AIA of more than $1 million in 2014 for suffering depression.

Meanwhile a 51 year old sales representative received an $85,505 Income Protection pay-out as a result of debilitating depression.

Make sure you’ve got the right cover

Here at Wealth Smart, we’ve already talked about how Australians are grossly underinsured when it comes to Life Insurance. We think it’s vital you have the right protection in place to guarantee you peace of mind should any possible scenario eventuate.

Watch TAL’s video about its 2014 findings here.

And if you would like to speak to a Life Insurance adviser, contact us today to chat with one of our experts. They’ve got the experience and expertise to help you find the perfect policy for your needs.

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