Insuring your greatest asset - you!

You insure your car and your home. But nothing is more important than your life and your ability to make a living. So it makes good sense to insure your greatest asset – you!

As we move through life, find a partner, raise a family, and maybe start a business, the importance of insurance in a long term plan increases. That’s because insurance is all about providing a financial safety net that helps you to take care of yourself and those you love when you need it the most.

Claims data from insurers can provide a greater appreciation of the importance of this cover, by highlighting some of the key areas of insurance claims.

Claims Data - 2019

The FSC/KPMG has released claims data for 2019 which looks at the causes of Life/TPD/IP claims, the split across gender, and the proportion of claims paid.

In addition to the amount and proportion of claims paid, there’s strong messaging around the prevalence of cancer, mental health, and accident related claims.

Key Observations:

Over $12 billion was paid out. That's over $33 million per day!

Life Benefit (97% of claims paid)

  • Cancer is by far the number one cause of death claims in men (39%) and women (61%)

  • Accidental death is much more prevalent in men (20%) than women (7%), even topping circulatory system failures (heart attack, etc)

Total & Permanent Disablement Benefit (90% of claims paid)

  • Mental health comfortably tops the list for men (24%) and women (27%)

Income Protection Benefit (95% of claims paid)

  • Accident is the top cause of claim across men (38%) and women (28%)

  • Mental Health was only 5th on the list for men (10%), but a clear second for women (22%). Unfortunately, these figures are tipped to rise in 2020/21 as we further realise the impacts of COVID-19

Crisis Recovery/Trauma Benefit (86% of claims paid)

  • Crisis Recovery/Trauma insurance information was limited; the highest cause of claim was for cancer at 58%

  • Crisis Recovery/Trauma wasn’t broken down to gender, however its’ importance is clear given the role of cancer as a cause of claim across Life/TPD/IP (particularly Life).

Life insurers paid $1.24 billion in 2019 to more than 9,500 Australians for mental health claims.

Drilling down these headline figures, the council says the claims are for an extremely wide and complex spectrum of conditions. The list has a very long tail and the top five underlying types of mental health conditions account for less than half (46.9 percent) of all claims for mental health conditions as follows:

  • 16.5% – depression, including single and recurrent episodes

  • 13.4% – unspecified anxiety disorders, for example panic or anxiety attacks

  • 11.3% – reaction to severe stress, for example post-traumatic stress disorder

  • 3.6% – Alzheimer’s disease

  • 2.1% – Schizophrenia

As always, feel free to get in touch if you would like to discuss or review your insurance needs.