An IFSA survey of its life insurance members (covering 90 per cent of the market) found over $2.3B in claims  were paid in the 2008 calendar year on nearly 35,000 policies.

Despite the overwhelming evidence some people still have a misconception that insurance companies don’t pay. Some people base their misconception on a story they may have seen on ‘A Current Affair’ , ‘Today Tonight’ or some forum on the internet. This trial by TV is unfair as we only ever get to hear one side of the story.

The truth is, insurance companies are legally obliged to quickly pay all valid claims. In event of a dipute over a claim there are many avenues open to a claimant including taking legal action. Then independent people will make a decision on the validity or otherwise of the cliam. If someone resorts to getting the TV stations involved you really need to ask why they went down that path rather than the legal path.

One important lesson is one should always make a full and honest disclosure. When you apply for insurance, you are required to fully disclose your current situation, be it health or employment. Where people get stuck is when they ‘non disclose’.  It means they haven’t fully told the insurance company what their real situation is. If you have an embarrasment with answering any medical questions face to face then just complete the form in your own time and mail back to the adviser or to the insurance company directly.

Don’t give an insurance company a reason not to pay. 

So the next time that you see someone upset that their claim hasn’t been paid, objectively ask yourself, I wonder if that person has forgotten to disclose their full situation…or what is the other side to this story.

The payout figures speak for themselves so don’t allow such a misconception stand in your way of getting the insurance you need.

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