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Step 25 - Claim Insurance & Other Benefits

Last updated: June 2019

Why is this important?

This step explains everything you need to know about life and other insurance claims, and what you need to know to determine if the claimable insurance benefit(s) will form part of the deceased estate or not.

 

simplyEstate is here to help with the process. Contact us via email or book a first free phone appointment.

Approximate Effort & Cost

Reading: 30 mins
Preparing: 1-2 hrs
Completing: 1-4 hrs
Total: 2:30-6:30 hrs
Cost: $0

Effort and cost are general estimates only and are based on the assumption that you complete this step without specialist help.

Instructions

To find out how this Process Guide works, access the instructions here.

Glossary

To find out what the capitalised words mean, access the glossary here.

25.1 Overview

As part of the deceased estate administration process you must identify all assets and liabilities that form part of the estate for distribution. If the deceased person has had insurances in place that may be claimed, or the surviving dependants may be eligible for other benefits, it will be important to:

  • find out about all insurances that were held;
  • contact the insurers to enquire about the policy and if a claim can be made;
  • find out the total value of all benefits applicable to the estate; and
  • update the simplyEstate Assets & Liabilities Inventory.

Contents
25.2 Beneficiaries of Insurance Claims
25.3 Types of Insurances
25.4 Make a Claim
25.5 Grant of Probate or Letters of Administration
25.6 Other Benefits that may Apply
25.7 Actions and Decisions to Complete Step

25.2 Beneficiaries of Insurance Claims

Most insurance policies that will provide a payout after a death of the insurance policy holder allow the Beneficiaries to be nominated or left out.

 

In most cases a life insurance is put in place to protect the immediate family financially. Therefore, the most common Beneficiaries nominated are the spouse and children but can also be other dependent persons, friends or business partners.

 

If Beneficiaries were nominated, then the relevant persons will need to make an application for the insurance payout if they are aged 18 or above and this will in most cases not form part of the deceased estate. You should:

  • read this Step in detail to ensure you understand key aspects;
  • identify if any insurances are in place;
  • check with the insurance providers if a Death Benefit applies and if Beneficiaries were nominated; and
  • inform the Beneficiaries and share this information with them.

If no Beneficiaries were named, then an application needs to be made by you as the Executor or Administrator on behalf of the estate as explained below.

25.3 Types of Insurances

There are numerous types of insurances and simplyEstate has summarised the most common types of policies that may have a claimable benefit after the insurance policy holder passes away for your consideration and review.

25.3.1 Funeral Insurance

If the deceased person had a funeral insurance cover, you should have claimed for this at the time when selecting the Funeral Director or planning the funeral. If the funeral has already been organised and held you may no longer be able to claim at this point in time. However, it is always worth checking with the provider and explaining your situation.

 

Step 1 – Immediate Steps After a Death and Step 4 – Locate the Will & Insurance Information mentioned to check for funeral insurance prior to taking any further steps to ensure a claim is made if available.

25.3.2 Life Insurance

A life insurance policy is specifically designed to pay a lumpsum to the nominated dependants or other persons nominated as Beneficiaries with the insurance provider after a person passes away or once diagnosed with a terminal illness. If someone was specifically nominated as the Beneficiary, that person will need to make the claim. However, if no person was nominated then you as the Executor or Administrator will need to make a claim on behalf of the estate.

 

If the deceased person had an active life insurance policy in place at the time of death you may be able to make a claim. You will need to check that the waiting period is over, the deceased person did not exceed the expiry age (usually 80 – 99 years of age) specified in the policy or any other conditions that are not met.

 

Common life insurance companies are:

  • Allianz Life Insurance
  • American Express Term Life Insurance
  • ANZ Life Insurance
  • Guardian Insurance
  • NobleOak Term Life Insurance
  • Ozicare Life Insurance
  • Qantas Life Insurance
  • RAC Life Insurance
  • Real Family Life Insurance
  • TAL Life Insurance
  • Virgin Money Tailored Life Insurance
  • Zurich Ezicover Life Insurance

If the deceased person had life insurance cover as part of their superannuation, see Step 24 – Deal with Superannuation as different rules may apply.

25.3.3 Mortgage Protection Insurance

This policy covers the cost of regular weekly, fortnightly or monthly mortgage repayments if the mortgage holder develops a medical condition, loses their job or passes away.

25.3.4 Accident Only Death Insurance

This policy is similar to a life insurance policy but only pays if the death was due to an accident or severe injury.

25.3.5 Compulsory Third Party Insurance and Car or Vehicle Insurance

In Australia all motor vehicles are insured by Compulsory Third Party Insurance also covering deaths caused by a motor vehicle accident. If the deceased person died in a car accident, then the person who caused the accident will pay from their Compulsory Third Party Insurance.

25.3.6 Travel Insurance

If the deceased person passed way during a private trip and was covered under a travel insurance, you should check with the insurance company if a claim can be made.

If the death occurred during a business trip, the employer should be contacted to check if a claim can be made from their travel insurance policy if one is in place.

25.3.7 Other Insurances

The deceased person may have been in the midst of an insurance benefit claim at the time of their death. You may still be able to finalise the claim depending on the situation, the cover and the circumstances under which the claim was initiated by the deceased person in the first place.

It may however also be the case that the insurance ends on the date of death, but it is worth checking directly with the insurance providers of any unresolved claims that may apply up until the date of death.

 

Insurance that may have such an ongoing or outstanding claim could be:

  • Health Insurance – claims for medical treatment or extras
  • Home & Contents Insurance – claims relating to the home or its contents
  • Worker’s Compensation – claims relating to an accident at work
  • Income Protection Insurance – claims relating to a replacement income due to illness or injury before the death
  • Trauma or Recovery Insurance – claims relating to serious illness or injury specified in the policy before the death
  • Total Permanent Disability Insurance – claims relating to permanent disability before the death
  • Car or Vehicle Insurance – claims relating to a car or vehicle
  • Public Liability Insurance – claims relating to an accident at an event where the event organiser’s insurance pays

simplyEstate is here to help.

Contact us via email or book your free first phone appointment.

25.4 Make a Claim

Each insurance policy provider may have their specific estate process outlined on their website. simplyEstate has summarised the following general steps that in most cases will need to be followed when making a claim with an insurance company.

 

Phase 1

  1. Notify insurance provider of the death
  2. Provide proof of death (Death Certificate)
  3. Verify who was nominated as the Beneficiary (Remember, if a Beneficiary was nominated it is their responsibility to make the claim and the claim does not form part of the estate. If no Beneficiary is named, the claim will be paid to the estate and the Executor or Administrator can apply)

Phase 2

  1. Complete and submit the necessary claims forms and supporting documents to the insurance provider
  2. Provide proof of identity of the Beneficiary, Executor, Administrator or Next of Kin
  3. Claims assessment by the insurance provider
  4. Claims assessment decision by the insurance provider
  5. Payment of claim by the insurance provider

The key objective at this point is work your way through Phase 1 (1-3) to establish if an insurance claim will be paid to the deceased estate or not. If not, then you can inform the Beneficiaries, share this page with them and move on to the next step as it doesn’t fall within your responsibility as Executor or Administrator.

25.5 Grant of Probate or Letters of Administration

The insurance provider will have varying document requirements depending on your situation and the size of the claim payable. If the claim is $50,000 or more, the fund will most likely request a Grant of Probate or Letters of Administration to finally release the funds to the estate, so you can then distribute the assets to the Beneficiaries.

 

This step is explained in more detail in Step 27 – Apply for Grant of Probate or Letters of Administration. If the insurance requests for this now already, you will need to explain that you require a statement showing the insurance claim benefit to apply for a Grant of Probate or Letters of Administration with the Supreme Court in your State/Territory. Once these are obtained you will contact the superannuation fund again with the Grant of Probate or Letters of Administration to continue the process to release the funds to the estate.

25.6 Other Benefits that may Apply

There may be other benefits that the deceased person’s estate may be entitled to if they were a:

  • member of the defence force or a war veteran;
  • civilian or public safety worker such as a fireman and police officer; or
  • member of a club, pensioner association or a trade union.

For other benefits such as widower allowances or bereavement payments please see Step 9 – Request Allowances & Government Support. These do not form part of the estate and hence should not be listed on the simplyEstate Assets & Liabilities Inventory.

25.7 Actions and Decisions to Complete Step

If you would like a little help from us at simplyEstate with this Step, you can email us or book your free first phone appointment. If you would like specialist help, get in touch with one of our Specialist Partners listed in the yellow section to the right or below and see how they can help.

 

If you have decided to tackle this Step yourself after reading and understanding this Step, you may want to:

  1. Determine what types of insurances were held;
  2. Contact the insurers to inform of the death, enquire about the policy details, if a claim can be made if the insurance policy holder passed away and who the nominated Beneficiary is;
  3. Inform the nominated Beneficiary of the insurance claim and share this information so they can apply for the claim, and share this page, so they can apply for the claim;
  4. Establish the total value for all benefits applicable to the estate where no Beneficiary was nominated; and
  5. update the simplyEstate Assets & Liabilities Inventory to show all the claims and benefits that form part of the estate.

Once you have completed all the necessary actions and decisions, you can move on to the next Step by clicking below or save progress at the top.

Do you need specialist help?

simplyEstate has partnered with select Specialists across Australia to assist you.

 

You can click on your State/Territory to find a suitable Specialist and get in touch to discuss how they can help you.

Estate Lawyers

 

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Tax Accountants

 

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simplyEstate Specialist Partner Listings coming soon in 2019.

 

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Get in Touch

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