It’s one of the most common myths – that insurers never pay.
In reality, the data tells a very different story.
The latest MoneySmart update (October 2025), covering claims finalised to 30 June 2025, shows that most genuine life insurance claims in Australia are approved and paid.
Typical Claim Results
Across the market, these are the industry average outcomes for claims over the past year:
- Death cover: around 98 % of claims accepted – typically 97–98% for adviser or super-held policies, and around 93% for direct insurance.
- Income Protection: generally 94–96% accepted, typically finalised within one to two months.
- TPD (Total & Permanent Disability): about 83 % for retail (advised) and 91 % for group (super), based on a 12-month reporting period.
Higher acceptance rates in group arrangements likely reflect the smaller sums insured and simpler eligibility, while larger, more complex retail claims can involve greater scrutiny. - Trauma (Critical Illness): industry average around 86 %, with most insurers falling between 85 and 90%.
That means the vast majority of people with life insurance receive support when it’s needed most.
Claims handled through an adviser also tend to show slightly higher acceptance rates and fewer disputes. Having professional help – from structuring cover correctly to preparing and lodging a claim – can make a real difference to outcomes.
(Figures reflect claims finalised in the 12 months to 30 June 2025.)
Why Claims Get Paid
Australia’s life insurance industry is closely regulated and governed by the Life Insurance Code of Practice, which sets out how claims must be handled fairly and transparently.
Differences between insurers are normal and often depend on things like:
- how the policy was set up (through super, direct or via an adviser)
- the type and complexity of claims received
- and how quickly information is provided.
These differences don’t necessarily mean one insurer or product is “better” than another – they reflect features, definitions and the way each claim is managed. The key message: most claims are paid.
The Positive Takeaway
Life insurance works. The numbers prove it.
Having the right policy – and the right support when a claim arises – can make the process faster and smoother. If you already have cover, review it regularly and make sure your family (or adviser) knows who to contact if a claim ever needs to be made.
Extra Notes
- Claim accepted rate: Shows how many claims were paid compared to how many were finalised. It includes both standard approvals and some cases paid even when not every technical rule was met.
- Average claim time: The typical time from when an insurer receives a claim to when it’s finalised and the customer is told the result.
- Distribution channel: Refers to how you got your insurance – for example, through a financial adviser, through your super fund, or directly online. Differences between channels mainly reflect how claims are managed and prepared.
