What is the key person insurance claims process?

The key person insurance claims process in Australia begins when a key person dies, becomes totally and permanently disabled, or suffers a trauma or critical illness covered by the policy. The business (as the policy owner) must notify the insurance company as soon as possible after the event occurs. The insurer will provide a claims form requiring detailed information about the circumstances, the key person's role, and medical evidence if applicable. For death claims, a death certificate and potentially a coroner's report are required. For TPD claims, comprehensive medical evidence proving permanent disability is needed, often requiring assessments from multiple medical specialists. Trauma claims require medical diagnosis confirming the critical illness meets the policy definition. The insurer may appoint an investigator to verify claim circumstances and may request business financial records to confirm the key person's importance. Professional advisers often proactively manage the claims process from start to finish. Processing times vary - death claims are typically faster (4-12 weeks) while TPD claims can take several months due to medical evidence requirements. Once approved, benefits are paid as a lump sum directly to the business (or as monthly payments if structured that way). The business can then use these funds according to the policy purpose - for revenue replacement, debt repayment, or capital needs as documented.