Life Insurance Claim

YBAF Pilot on 17/01/2024 - 12:45

Hi Everyone,

We as a family have had an ardous holiday period with a death in the family by suicide. We are only now coming up for air and getting stuck into some paperwork. I just wanted to see if I can get some clarity via this forum regarding life insurance claims. We as a family are in the process of engaging with laywers but we have one pressing question which came up last night after we reviewed the PDS of the life insurance policy hence why I thought of asking it on here to see if my interpretation of the PDS is correct.

Now the PDS states the following:
That suicide within 13month will not payout on the following conditions:
- 13months from the date your cover starts.
- 13months from the latest reinstatement of your cover
- 13months from the your cover increases, for that increased cover.

Our family member started his policy on the 10/10/2019 through his Self Managed Super Fund (SMSF). It has never lapsed, been paused or stoped in any shape of form. So to condition 1 I dont think that there is an issue. I confirmed this by looking at his Certificate of Currency which mentions the start date of 10/10/2019. The policy renews yearly on the 10 of October. The cover itself has never been increased by the policy holder himself. From what I can see is that cover has just increased to keep with inflation is my understanding of it i.e. between the previous year and this year the cover increased by approximately $50k. Now condition 2 from my understanding is only relevant if the policy has lapsed and or was paused and then was subseuqtently reinstated/started again. As mentioned in this case the certificate of currency proves that the cover has been continious since 2019, so I don't see an issue with condition 2 either. Condition 3, per my understanding mean that only the increase of $50k mentioned wont be paid out.

I appreciate anyone reading this long winded explantion and taking the time to provide their interpretation of it. As mentioned we are engaging with lawyers, my mother is currently going through that process and I think we should have someone lock down by next week. I am just trying to ease emotions wherever I can.

Financial Insurance Life Insurance

Comments

  • Gdsamp on 17/01/2024 - 12:52
    +16

    Sorry for your loss OP.

    • YBAF Pilot on 17/01/2024 - 12:54
      +1

      Thank you I appreciate that.

  • barge-in hunter on 17/01/2024 - 12:55
    +4

    Sorry I can’t answer your questions - but sorry for your loss.

    Best to speak with the insurance provider

  • Muzeeb on 17/01/2024 - 13:02
    +4

    All the best through these tough times. My only suggestion is to pay professionals for accurate advice which it seems you will be doing.

  • deveshwar0 on 17/01/2024 - 13:04
    +5

    Sorry for your loss OP.
    I have interpreted the PDS the same as you have on all points.
    Not a lawyer, so can't guarantee anything but I see that you're already engaging someone soon. Good luck and stay strong.

  • Duckie2hh on 17/01/2024 - 13:10
    +7

    Your deduction sounds correct.

    • YBAF Pilot on 17/01/2024 - 13:13
      +2

      Thank you for sharing. It is nice to just do a sence check. I would think the lawyers would interpret it in a similar fashion. Thank you again for weighing in.

  • sumyungguy on 17/01/2024 - 13:12
    +10

    I would suggest you lodge the claim with the insurer first, an arduous but necessary step. If they reject your claim that's when you should consult superannuation advisors or solicitors. But save your cash initially; the legal profession will be trying to get a share of the estate. And condolences to you and your family.

    • YBAF Pilot on 17/01/2024 - 13:16

      Sound advice and we have thought of this but we have dicussed this as a family and decided that we are not going to lodge the claim until we have clarified our questions with the appropriate lawyers. The policy holder also had a Financial supervisor through his SMSF which we will get into contact with over the next few days (he is currently on leave).

      • FoxJump on 17/01/2024 - 13:48
        +5

        There's no questions to clarify with the lawyers.
        The PDS is as it is.
        The lawyers can read into it all they want, but at the end of the day the claims department will act upon it with their interpretation and approve or reject the claim.
        it's only really once they reject it that you have to start butting heads with lawyer vs insurance company over the reasonable interpretation of the PDS.

      • 1ch1go on 17/01/2024 - 13:54
        +5

        I agree with @sumyungguy. Lodge the claim with the insurer. With life cover, it is very simple and straight forward. There's no need to go through a lawyer, they will take a big chunk of the payout. The advisor can definitely help with the claim for you.

  • kmwa on 17/01/2024 - 13:30
    +5

    Condolences.
    This makes a lot of what we do on ozbargain look pretty trivial.
    But I would question your interpretation of point 3…
    If the insured person increased his cover by a million dollars and then committed suicide, that wouldn't be covered. But in your case, the insured person did not increase the cover - it was done automatically by the insurance company. Hoping that your lawyer is sufficiently forceful to press this point.

    • shrek4 on 17/01/2024 - 14:23

      I agree with the above. As the additional coverage was initiated and applied by the insurance company without request from the policyholder, then the third condition wouldn't apply. Otherwise, what would stop an insurance company from increasing all their policyholders coverage on an annual basis and 'resetting the clock'? Wouldn't make sense.

      P.S. I'm sorry for your loss; what a gut-wrenching thing for your family to endure. Best of luck in your healing.

    • Jolakot on 17/01/2024 - 14:45

      From the wording of "for that increased cover", I'd assume they'd get whatever the cover amount was 13 months ago, so in this case the full policy payout minus a million dollars

    • cookie2 on 18/01/2024 - 21:08

      Agreed. There was no increase in cover.

  • urahara on 17/01/2024 - 13:33

    Sorry for your loss OP.
    Same thoughts as you have

  • 1ch1go on 17/01/2024 - 13:51
    +4

    Sorry for your loss OP. I work in life insurance and from what I can tell from what you said in your post, there shouldn't be any issue getting a payout. Condition 3 usually doesn't apply to an increase because of CPI indexation but each insurer may have different T&Cs.

  • AustriaBargain on 17/01/2024 - 14:55

    Whoever is the beneficiary maybe could speak to a lawyer to help sort it out. If there's a chance a technicality could get an extra 50k then it could be worth it.

  • happydude on 17/01/2024 - 15:10

    The PDS should have definitions at the beginning or end. Check it for the terms in the clause.

    I wouldn't think a CPI increase would be an "increase in cover". That would likely be a customer initiated thing. A CPI increase is a scheduled and agreed adjustment to the payout amount.

    Can you share the company so the PDS can be looked at?

    EDIT: Looks like Ezicover Life Insurance and the CPI increase (called 'Inflation protection') is an optional extra that does result in an "increase in cover". I'd say your assessment is correct.

  • jv on 17/01/2024 - 15:10
    +1

    Sorry for your loss…

    If the insurer causes issues, there's always AFCA.

    https://www.afca.org.au/make-a-complaint/insurance

  • Vheissu on 17/01/2024 - 15:27
    +1

    I'm sorry for what you're going through. Life insurance is meant to offer peace of mind, but insurance, despite the protection it affords, comes with the anxiety and confusion of whether they will pay or try getting out of it.

    I am not a lawyer or insurance expert, so the lawyers and insurance company will be the best port. But, applying my programming logic to this. This is how I understand things, and I hope this helps you.

    Based on the information you provided, your family member’s life insurance policy seems to have been active since 10/10/2019 and has never lapsed, been paused, or stopped. Therefore, the first condition mentioned in the PDS does not apply to your family member’s policy.

    Regarding the second condition, you are correct that it is only relevant if the policy has lapsed, was paused, and then reinstated/started again. Since your family member’s policy has been continuous since 2019, there should be no issue with this condition.

    As for the third condition, it appears that the policyholder has not increased the coverage himself, and the increase in coverage is due to inflation. Therefore, only the increase of $50k mentioned in the PDS will not be paid out in the event of suicide within 13 months of the increase.

    Please note that this is my interpretation based on your provided information, and I am not a legal expert. It is always best to consult with a lawyer to get a definitive answer to your question.

  • bobbified on 17/01/2024 - 17:14

    Condition 3, per my understanding mean that only the increase of $50k mentioned wont be paid out.

    If indexation of the insured amount was part of the original policy agreement, that should get paid out as well. 'Indexation' of the insured amount happens a lot at review each year. Sometimes it's based on a flat amount and sometimes based on the increase in salary/income (provided it doesn't go over any forward underwriting limits). I have never seen the insurer decline the last "increase" in insurance cover for any reason (even for suicide).

    As long as the rest of the policy is in good order and there hasn't been adverse selection against the insurer, they have no reason to hold back any amount.

  • vegemite2008 on 17/01/2024 - 19:35

    Sorry for your loss.

    My advice is to let a lawyer do all the communication with the insurance company.

    Don't engage at all with the insurance company send everything to the lawyer.

    Insurance companies will often try to get out of claims if possible.

    Lawyers are not cheap but you don't need the extra stress by doing things yourself at this stage. Look after yourself.

    • clover on 18/01/2024 - 23:55
      +1

      This couldnt be more incorrect. (~98% of death claims are paid). death claims are also paid fastest too
      ASIC published stats of all life insurance in Australia here every 6 months:

      To OP, I interpreted all the terms and conditions same as you. If all the other documents (death certificate, policy documents, beneficiaries, premium payments etc) are in order, the insurer will pay promptly.

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