The claims process no one explains until you need it
The insurance claims process is something most Australians hope they never need, but when life throws a curveball, understanding how the insurance claims process works can make a real difference.
For many people, the hesitation starts early. They are not sure if what happened is serious enough. They worry about bothering someone. They assume they will be told no.
That delay is often the biggest mistake.
During Claims Corner, Marie Bailey and Phil Thompson broke down what actually happens when a client reaches out, what counts as a claimable event, and why timing and communication matter more than most people realise.
This is not about scare tactics. It is about knowing what to do when something unexpected happens.
“If you’re unsure, don’t sit in silence. Reach out for help.”
What most people only realise once it happens
The insurance claims process does not start with paperwork. It starts with a conversation.
Most people do not reach out about a claim straight away, not because nothing is wrong, but because they are unsure if what is happening is “serious enough”.
That hesitation is one of the most common patterns advisers see.
In real conversations, this ranges from minor injuries that quietly turn into weeks off work, to hospital stays people did not think were relevant to their cover. Sometimes it is a short disruption. Other times it becomes something far more significant than expected.
The misconception is that claims are only for extreme situations. In reality, many policies respond earlier than people realise. Some income protection policies include specific injury benefits. Some trauma policies respond to diagnosis rather than time off work. These features are easy to miss unless someone asks.
Waiting does not usually protect people. It often just delays clarity.
Those early check-in conversations are often the difference between a smooth process and a delayed or missed benefit. Even if the answer turns out to be no, knowing early gives people certainty at a time when everything else already feels heavy.
“It’s better to ask than be at home suffering and not having an income.”
Step one in the insurance claims process: pre-assessment
Before any forms are sent, the insurance claims process usually begins with a pre-assessment.
This means reviewing the policy wording and understanding exactly what happened.
Policy documents matter here. The Product Disclosure Statement sets out what is covered and what is not. It is detailed, technical and often overwhelming for clients going through health or financial stress.
That is why pre-assessment exists.
If the situation looks straightforward, the claim process moves quickly. If there is uncertainty, insurers can be contacted to clarify admissibility before paperwork is lodged.
This step helps avoid unnecessary stress and delays.
“That policy document is very prescriptive in what is and isn’t covered.”
There is no strict deadline to make a claim
Another common misunderstanding in the insurance claims process is timing.
Many people assume there is a short window to submit a claim. In most cases, that is not true.
As long as the policy was in force at the time of the injury or illness, and there is medical evidence to support it, claims can often be submitted much later.
Even if the policy has since been cancelled, claims may still be possible if the event occurred while the cover was active.
This matters for people who only realise later that a past event could have been claimable.
“Even if you’ve cancelled your policy, you can still go back and claim if it was in force at the time.”
What actually happens once a claim is lodged?
Once a claim is formally lodged, insurers issue the relevant forms. These differ depending on the type of cover.
Life insurance, trauma, income protection and total and permanent disability all have different requirements.
Medical evidence is always required. This can include doctor reports, scans, pathology and treatment records.
Financial evidence is also common, especially for income protection claims. This is where delays often occur, particularly for self-employed clients who may not have up-to-date financials.
Insurers do not guess. They assess claims based on evidence.
“Insurers don’t just lick their finger and stick it in the air.”
Why some claims are paid faster than others
Not all claims are assessed at the same speed.
Life and trauma claims are generally the quickest once documentation is complete. Income protection claims take longer because of waiting periods and ongoing assessments.
Income protection benefits are assessed in arrears. This means the insurer does not start paying until the waiting period has been fully served.
Total and permanent disability claims take the longest. By definition, they require proof that someone is unlikely to ever return to work. That level of certainty takes time.
“By the very nature of what it covers, TPD is the most difficult claim to process.”
Make it stand out
Clients are allowed to manage their own claims. They can also engage lawyers.
However, many choose to work with their adviser because claims happen during some of the hardest moments of life.
Advisers understand how the policy was set up, what features apply, and how insurers interpret definitions. They also help monitor timelines and follow up when delays occur.
Claims support does not stop once a claim is accepted. Ongoing income protection claims, indexation, reviews and reinstatement features all require monitoring.
“We’re not just here to get the claim paid. We’re here for the whole process.”
The takeaway
The insurance claims process is not something to fear, but it is something to understand.
Reaching out early, even when you are unsure, can make a real difference. Many claimable events are missed simply because people do not think they can claim on their insurance policies.
Insurance exists for the moments when life goes off script. Knowing how the insurance claims process works means you are not navigating those moments alone.
Resources
ASIC MoneySmart. Life insurance and claims
APRA. Life insurance claims statistics 2023
https://www.apra.gov.au/life-insurance-claims-and-disputes-statistics
Services Australia. Income support and incapacity
Claims Corner transcript with Marie Bailey and Phil Thompson