How to Make a Claim for Income Protection Insurance

If you’re unhappy with the insurer’s decision, you can always ask them for more information and even make a complaint. After doing this, if you still aren’t able to reach an agreement, you can make a complaint to the Australian Financial Complaints Authority.¹For more information, see Australian Financial Complaints Authority – Insurance complaints

However, before you expect the worst, you might like to know that in 2024 about 95% of income protection insurance claims in Australia were accepted.²Finalised income protection claims combined across distribution channels. Australian Prudential Regulation Authority – Life insurance claims and disputes data December 2024

It can be frustrating to find your claim denied, but your insurer likely has a valid reason. This could include:

• your circumstances not being covered by the policy, including any listed exclusions, your inability to work not being caused by an injury or sickness, or failing to follow doctor’s instructions
• your waiting period hasn’t ended or your benefits period has expired
• you’ve misrepresented your income or failed to disclose pre-existing conditions.

If you’re looking to claim income protection, it might help to remember there’s no such thing as a silly question. If you’re not sure about something, your insurer should be able to help fill in the blanks. Otherwise, your claim may be denied based on incomplete information. In fact, of the 4% of rejected income protection claims that were reversed in 2024, a third were because further information was provided.³Dispute outcomes and original decision reversed reasons combined across distribution channels. As above

Each income protection claim is unique. This means some may be processed more quickly than others. How long you’ll need to wait can depend on a range of factors, like the complexity of your claim and how much information the insurer needs to review. However, in 2024, the majority of income protection claims were processed within two months – 50% were processed within just two weeks.⁴Claims processing duration combined across distribution channels. As above

Even if there’s no guarantee on how soon your claim will be processed, the industry does have regulations to ensure claims aren’t drawn out unnecessarily. For instance, when you reach out to your insurer to start a claim, they have 10 business days to respond and bring you up to speed on their claims process. Then, once you’ve provided all the requested information and your insurer has followed up any other related enquiries, they need to tell you their decision within 15 business days.

These regulations also help to keep you informed of your claims progress. For example, your insurer needs to update you on your claim every 20 business days – unless you agree on another time frame. Similarly, you’re allowed to request information about your claim at any point and your insurer needs to respond within 10 business days.

This will depend on your policy, but it could be up to 70% of your pre-tax monthly earnings. You might want to review your policy documents and look for any information regarding benefit amounts, as well as the benefit period, to check how much you’d likely receive and for how long for.