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Life Insurance

Paying Life Insurance Claims: Does it make a difference if you buy direct or through an adviser?

13 Jul 2018

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

We all know that paying claims is what Life Insurance companies are all about. But does it make a difference if you buy direct or through a financial adviser?

According to a recent report from the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) it definitely does.

The report, published in May 2018, looked at the number and type of claims paid over the 6 months from 1 January to 30 June 2017.

Whilst 97% of all death claims were processed irrespective of how the cover was bought, if the cover was bought through an adviser or through a group policy (such as inside super) the payment rate was 98% compared to buying direct which was 88%.

The Adviser vs Direct Difference

The main reason for this difference (98% vs 88%) is because cover bought through a financial adviser is fully underwritten. This means that when you apply for cover you complete a comprehensive health and lifestyle questionnaire and these details form the basis of your offer of cover.

This process affects two things:

  • The premium you pay for the cover as the insurer knows everything about your health and can rate the risk and tailor the terms to your individual circumstances.
  • When a claim situation arises, as long as all the facts provided at the time of underwriting were accurate, no further health details are generally required in order for the claim to be assessed.

The NobleOak Difference – the best of both worlds

NobleOak is a different direct insurer. We provide fully underwritten cover and comprehensive, quality Life Insurance products which include Life, Total and Permanent Disability, Trauma and Income Protection.

We can offer the same levels of cover as all the major Life insurers because we fully underwrite the cover.

A full health assessment is completed when you apply for cover and we tailor terms to your individual circumstances. This process ensures things are smooth and efficient in the event of a claim. And importantly, you know exactly what you are covered for.

By comparison, many other direct insurance policies contain automatic exclusion clauses which apply to pre-existing medical conditions (PECs). This means any medical condition for which you were being treated at the time of application, or for which you may have been treated by a doctor in the past, will be excluded under the policy. Death caused by any of these medical conditions could result in a claim being declined.

Additionally, because other direct insurers don’t fully underwrite your cover you are more likely to be paying a higher premium for your cover than if you had taken out cover which was fully underwritten.

NobleOak has been recognised for our comprehensive covers and service by winning a number of industry awards since 2015, such as Canstar’s Outstanding Value awards for both Life Insurance and Income Protection for the last three years.

With NobleOak, you deal directly with us (so there is no middleman) and you will pay on average, 20% less compared to other direct insurers or through an adviser.


18-150MR APRA and ASIC release new life-claims data

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