Business Life Cover :: News
SHARE

Share this news item!

Significant Delays in Income Protection and TPD Claims Raise Industry Concerns

Life Insurance Code Compliance Committee Reports 67% Increase in Payment Delays

Significant Delays in Income Protection and TPD Claims Raise Industry Concerns?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Recent findings from the Life Insurance Code Compliance Committee (Life CCC) have highlighted a concerning trend in the Australian life insurance industry: a significant increase in delays for income protection and Total and Permanent Disability (TPD) claim payments.
In the financial year 2024-25, violations of the industry's code regarding timely income protection payments surged by 67% compared to the previous year, affecting a substantial number of policyholders.

These delays have profound implications for individuals who rely on these benefits during periods of illness or injury. Timely income protection payments are crucial for maintaining financial stability when individuals are unable to work. Delays can exacerbate financial stress, leading to difficulties in meeting daily expenses and long-term financial commitments.

One contributing factor to these delays is the increasing complexity and incidence of mental health-related claims. The Council of Australian Life Insurers reported a significant rise in mental health-related TPD claims over the past decade, reflecting broader societal trends and placing additional strain on the claims processing system.

The Life CCC emphasized the importance of clear and timely communication between insurers and policyholders. Uncertainty during the claims process can add to the stress experienced by claimants. Therefore, insurers are urged to improve their communication practices to ensure that claimants are well-informed about the status and expected timelines of their claims.

For business owners and executives, these findings underscore the necessity of thoroughly understanding the terms and conditions of business life insurance policies. Ensuring that policies are with insurers known for efficient claims processing and clear communication can mitigate potential issues. Additionally, businesses should consider the adequacy of their coverage, especially in light of the increasing prevalence of mental health-related claims.

In conclusion, the rise in delays for income protection and TPD claims highlights the need for the life insurance industry to address processing inefficiencies and enhance communication practices. For policyholders, particularly business owners and executives, staying informed and proactive in managing insurance policies is essential to ensure financial protection during unforeseen circumstances.

Published:Wednesday, 10th Jun 2026
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Rate this article

0 Comments

No comments yet. Be the first to share your thoughts.

Insurance News

Why Claims Handling Scrutiny Matters for Business Owners
Why Claims Handling Scrutiny Matters for Business Owners
09 Sep 2026: Paige Estritori
Fresh compliance attention on life insurance claims handling is a timely reminder that cover is only valuable if it can respond clearly and efficiently when a business is under pressure. Recent industry monitoring has again highlighted familiar issues for life insurers, including claim delays, communication gaps, repeated evidence requests and the need for more consistent support where customers are vulnerable or dealing with complex medical events. - read more
Why Tax Purpose Matters When Structuring Business Life Insurance
Why Tax Purpose Matters When Structuring Business Life Insurance
02 Sep 2026: Paige Estritori
Tax treatment of business-owned life insurance is again attracting attention as accountants and advisers work through year-end planning with SME clients. The central message is not new, but it remains widely misunderstood: business life insurance is not treated as one simple tax category. The purpose of the cover, who owns the policy and how any claim proceeds are intended to be used can all affect the outcome. - read more
Genetic Testing Reform Could Shift the Way Business Owners Approach Life Cover
Genetic Testing Reform Could Shift the Way Business Owners Approach Life Cover
26 Aug 2026: Paige Estritori
Australia’s move to restrict the adverse use of genetic test results in life insurance underwriting is more than a consumer health issue. For business owners, directors and partners, it may influence how confidently they approach cover that protects debt, ownership succession and the financial impact of losing a critical person. - read more
What the Next Advice Reform Steps Mean for Business Cover
What the Next Advice Reform Steps Mean for Business Cover
19 Aug 2026: Paige Estritori
Australia’s financial advice reform agenda has moved from broad policy debate into the more practical question of how advice will be delivered, documented and accessed. For business owners, this matters because life insurance decisions are rarely isolated personal choices. They often intersect with debt facilities, director guarantees, shareholder agreements, succession plans and family wealth protection. - read more


Life Insurance Articles

How to estimate business life insurance cover needs
How to estimate business life insurance cover needs
Estimating business life insurance cover starts with identifying what the policy is meant to protect: revenue, key people, business debts, ownership succession or personal guarantees. This guide outlines practical steps Australian SME owners can use before requesting quotes or advice. - read more
Who should own a business life insurance policy?
Who should own a business life insurance policy?
Business life insurance ownership affects who controls the policy, who receives a claim payment, and whether the cover supports key person, buy-sell or debt protection planning. This guide explains common ownership and beneficiary structures for Australian businesses. - read more
Tax treatment of business life insurance in Australia
Tax treatment of business life insurance in Australia
Business life insurance premiums and payouts may be treated differently for tax purposes depending on the policy purpose, ownership structure and who receives the proceeds. This guide explains the general Australian tax principles for key person, buy-sell and debt protection cover. - read more
Understanding the Costs of Business Life Insurance for Australian SMEs
Understanding the Costs of Business Life Insurance for Australian SMEs
Business life insurance is a special type of coverage that protects businesses from financial uncertainties that arise from the unexpected death of a key individual. For small to medium-sized enterprises (SMEs), this insurance can be an essential part of their risk management strategy. By covering debts, providing funds to secure successors, or safeguarding against disruptions in operations, business life insurance plays a crucial role in ensuring stability. - read more

Knowledgebase
Elimination Period:
The time period between an injury and the receipt of benefit payments from an insurer, particularly in disability insurance.