Coroners Court Backlog Could Delay Full Death Benefit Payments

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With the coroners’ courts facing a backlog of cases RiskinfoNZ set out to find if this was having any impact on death benefit payments to bereaved families.

According to official statistics it currently takes an average of 455 days to close a coronial case – it’s just over 400 days in Auckland and more than 600 days in Christchurch.

Aupito William Sio, the Minister of Courts, reckons the number of coronial inquiries awaiting decision will be 3,500 by January 2024, up on more than 3,000 currently. The situation could place some financial advisers in a difficult position, so we sought advice from insurance providers.

Kris Ballantyne, Chief Marketing Officer at Partners Life says its life policies pay out a percentage of the policy value up to $25,000 without any supporting evidence upon the notification of death, to cover the immediate costs bereaved families may face.

“Where the coronial delays matter is for the remainder of the death benefit,” says Ballantyne. “Yes, there is a delay in the coronial system in general, but from our experience a lot of the delay in having a proper certificate of death issued can come from police investigations rather than the coroner.

Kris Ballantyne, Chief Marketing Officer, Partners Life.
Kris Ballantyne, Chief Marketing Officer, Partners Life.

“And the reason why that’s important is that you don’t want to be paying a death claim to a policy-owner who could be implicated or suspected in a death. Unfortunately, that happens more times than you might imagine.

“When a death is natural causes or an accident you don’t need to wait for a coronial report. But overall we haven’t been impacted by coronial delays.”

Gail Costa, Cigna NZ’s CEO, says like all life insurance providers, her firm requires confirmation of cause of death in order to assess a claim.

“In a number of cases, we’ll accept a death certificate or interim report pending the outcome of a coroner’s hearing,” she says.

“A number of our life insurance policies offer a benefit which provides customers with a partial early payment which helps families to pay for things like funeral costs. We then pay the remainder of the sum insured once the claim has been fully assessed and accepted.

“Advisers are aware of these benefits and work closely with customers to determine whether they are eligible for the early payment benefit and any other benefits provided by their policy.”

Kath Johnson, Fidelity Life’s Chief Insurance Officer, says the company is extremely sympathetic to anyone affected by a delayed coroner’s report.

“We pay claims as soon as we have all the information we need to satisfy our criteria,” she says. “In some instances the information we need can be provided by other parties, not just the coroner’s office, for example an autopsy report.

“It’s only in very rare situations – two or three times a year in our experience – that we require a full coroner’s report in order to assess and progress a death claim.”

Kath Johnson, Fidelity Life.

Johnson says financial advisers play a key role in supporting customers and their families through any claim, sometimes assisting the firm with information gathering.

“In the event of a delay in collecting information or assessing a claim, we work closely with advisers to help customers understand the reasons why,” says Johnson.

“In many cases a bereavement benefit payment of up to $15,000 can be paid immediately on notification of the claim, provided we have some proof of death.

If a claim is delayed, irrespective of the reason, we are required by law to pay interest at the statutory rate from the 91st day after the date the customer passes away. Fortunately, delays are the exception and in FY20 we accepted 95% of death claims.”

Sharron Botica, Chief Customer Officer, AIA NZ says if her firm receives a death certificate which states the cause of death is subject to coroner’s findings it will seek alternative ways to verify the information using medical records, publicly available information, or police reports to cover off any final requirements before accepting the claim.

“A common barrier to a quick payment is the policy not having a surviving owner,” says Botica. “In these cases, the life assured’s loved ones may need to work through a legal process to establish the rightful policy owner / benefit recipient.”