What happens when you make an insurance claim?

May 2016

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UniSuper’s insurance report card in numbers (12 months to June 30, 2015):

  • 1,259 claims paid (both ongoing claims and claims fully paid out)
  • $58 million paid over the year (or $234K per day)
  • 33% claims were cancer-related, 33% were mental illness-related, 33% other

Living a happy and healthy life is the ideal scenario for everybody, but sometimes things can go wrong. We’re not always ready for the unexpected and that’s where insurance comes in. We spoke to Amalia Faba, Insurance and Claims Manager at UniSuper about how we process claims and the importance of keeping your insurance details up-to-date.

What are the common steps you take when processing an insurance or death claim?

Members, or in some circumstances, family members of a UniSuper member, will usually contact our Claims Assist team. The team talks members through the claims process, ensuring they understand what’s involved before we send some paperwork to complete.

Once we receive the completed paperwork, the claim is allocated to a claims case manager who looks after the claim from beginning to end. Each claim is subject to approval by the Fund’s Insurance Management Committee before we can complete the final processing and payout of approved claims.

When a member passes away, a similar process applies to claim the benefit. In this case a claims case consultant will communicate with potential beneficiaries of the deceased member to explain the process and keep them informed on the claim’s progress.

What tends to delay death claims from being paid?

Death claims under Superannuation Law are complex. The Trustee is obliged to protect the deceased member’s benefit and can only release it once the appropriate beneficiary or beneficiaries have been identified. This may seem like a simple process but can be long—resulting in delays in finalising the claim for reasons that include:

  • delays in receiving relevant documentation from all potential beneficiaries at such an overwhelming and emotional time
  • complex family structures that often require investigation on behalf of the Trustee to establish the appropriate beneficiaries, as outlined in the Superannuation Industry (Supervision) Act 1993 (SIS Act) and UniSuper's Trust Deed. This can include identifying financial dependents, children from previous relationships and other dependants who may not be discovered until we receive all initial documentation
  • investigations into cause of death by the Coroner’s office or police (when a cause of death is unknown) which may delay the availability of a death certificate, which is a mandatory requirement in confirming the death of a member
  • no dependants being identified which means the Trustee has the discretion to pay the benefit to the Legal Personal Representative of the estate. In order to confirm this, the executor must apply to the courts for Probate (where there is a will) or the senior next of kin must apply for Letters of Administration (where there is no will). Probate is a legal step before a person’s estate can be administered or distributed to the beneficiaries.

What can typically cause an insurance claim to be denied?

There are a number of reasons why a claim might be denied.

We sometimes find that members aren’t eligible to claim. For example, if you're a Defined Benefit Division (DBD) member and make a Temporary Incapacity claim, one of the criteria you need to be absent from active employment for at least three months within the 12 months period immediately before lodging as a result of the claimed condition. If the information presented indicates you have been absent for fewer than three months, your claim could be denied.

Your claim, when assessed, might not meet our external insurer’s policy definitions or UniSuper's Trust Deed’s definition of the insured benefit you’re applying for. For example, if you're a DBD member applying for inbuilt Disablement benefit, the Trust Deed’s definition for Disablement amongst other things stipulates that you're required to be in…. a state of health that in the opinion of the Trustee renders you permanently incapable of performing duties or engaging in employment for which you are reasonably qualified by training and experience…. and this must be established by way of medical evidence in support. If we receive information from a treating medical professional stating otherwise, your claim may be declined.

What are your top insurance tips?

  • Think about life’s unexpected events and how much cover you may need. What will adequately cover my family if something happens to me? How will I cope with ongoing medical expenses and possible home renovations if I have an accident or suffer a serious illness? Review your cover on a regular basis.
  • Know what you’re covered for. Understand how your cover works and what is available on request (e.g. transferring your insurance over from another fund, applying for more cover, etc.).
  • Check and update your nominations (whether preferred or binding) as your life unfolds.

What’s the difference between binding and preferred death benefit nominations?

There are two types of nominations – preferred and binding.

A preferred nomination lets us know who you’d like to receive your benefits when you die, but isn’t binding, so we’ll generally look into your circumstances before paying the benefit to check whether anything has changed. A valid lapsing or non-lapsing binding death nomination means your super benefit is distributed the way you want it to be among your dependants or legal personal representative(s).

We’ve found that members sometimes don’t understand the difference between the options, which can mean their death benefit might not be paid the way they want them to. We also find that members’ lives can change a lot after they submit their nominations. After seeing firsthand the challenges this brings, we encourage members to keep their nominations up to date, especially when they become parents or go through a relationship change. Remember too that it’s one thing to name a person in your Will; it’s another to name them as your super beneficiary.

Want to read more about making a nomination? Check out our Binding death nomination fact sheet for more information.

Do you have questions about your cover? Check your latest benefit statement, visit our insurance section or contact us on 1800 331 685.