A slight decline in term insurance claims paid last year has been mostly offset by higher claim benefits paid across TPD, trauma and income protection insurance, according to the risk store’s 2009 industry claims data.
This annual claims report summarises data provided by each of the retail life insurance companies for individual and group insurance claims paid during the preceding calendar year.
Individual and group insurance claims paid during 2009 totalled $2.78 billion (compared with $3 billion in 2008), which converts to more than $11 million being paid to beneficiaries each working day of the year.
“This is a great news story about the part insurers play in these claimants’ lives”, said risk store MD, Peter Wincott. “That’s why we pull these stats together, on behalf of the insurers, for advisers to educate their clients,” he said.
At a time when adviser remuneration and underinsurance issues are at the forefront of industry debate, the risk store points out in its release that:
- Not one of the claimants expected to claim on their insurance
- If these claimants hadn’t received $2.78 billion from insurance policies, where else would their financial support have been sourced?
- If it wasn’t for advisers’ proactivity and sheer effort, most of these claimants and their families and businesses would have received nothing to support their financial outfall
.. this huge payment of benefits to consumers is in danger of significant decline
risk store founder, Sue Laing, reinforced these points to riskinfo, commenting that this huge payment of benefits to consumers is in danger of significant decline if advisers are forced to charge a fee for insurance advice in future:
“For risk insurance specialists particularly, the business model could be devastating. Many financial planners are supportive of reform, but it’s easier for them to package their risk advice inside an overall financial planning fee,” said Ms Laing.
“But the risk specialist, who often is the only one who can deliver to the difficult-to-insure consumer, doesn’t have that model to work within,” she said, adding that “… only a small proportion of risk specialists have the infrastructure to provide a full estate planning service, for a fee.”
Ms Laing said the potential for serious impact on the viability of hundreds of advice practices would translate directly to the financial security of hundreds of thousands of consumers, and would place an even greater burden on the Government and therefore the tax payer, to fund much higher social security benefits in the absence of self-sufficiency:
“The government of the day could find themselves having to fund half of that $3 billion from their budget, somewhere down the track, after the effect of this potential reform really bites,” Ms Laing predicted.
A breakdown of the 2009 claims statistics by product are avaiable to risk store members.
