Life is uncertain and no-one really knows if debilitating illness and injury is around the corner, possibly preventing them from working ever again. This is why many people hold total and permanent disability (TPD) insurance as part of their superannuation fund or as a stand-alone policy – to provide financial support for themselves and their family if the worst happens.
Generally speaking, TPD policies are lengthy and complex documents, with a lot of fineprint detail on the ‘exclusions’ which might prevent a person making a claim under the policy and accessing a lump sum payment. Before signing on to a TPD policy, or to have your current TPD coverage reviewed, it’s highly advisable to consult with expert legal professionals who can help explain the nature of the policy and the circumstances under which a claim can be made.
How TPD policies work
TPD policies generally take one of two forms. The first type of policy is known as ‘own occupation’ coverage. It provides cover when a person is unable to work again in the specific job or industry they were working in before the disability, illness or injury which ended their work life. The other type of TPD policy is ‘any occupation’, providing financial coverage where the person making a claim is unable to work again in any job suited to their education, training or experience.
Own occupation policies are usually a more expensive option because the policy is specific to the circumstances of the claimant, while any occupation policies are generally more financially accessible because they cater to a wider range of possible scenarios.
An insurer will require a lot of personal information from the person seeking to take out TPD insurance, including their age, occupation, medical history, family medical history, lifestyle (smoking, level of drinking, etc), whether they participate in any high-risk sports or hobbies, and other information. This information will be used by the insurer to set the amount of the policy’s premiums and the other terms and conditions of the policy.
It’s important the information a person provides to the insurer is accurate and truthful. Dishonest information later discovered during the process of making a claim may see the request to be paid out declined.
TPD insurance premiums, in general, are either ‘stepped’ – meaning they are recalculated each time the policy is renewed and increase to reflect the insured person’s advancing age – and level premiums, where a higher premium is initially charged but further increases occur more slowly over time and are not age-dependent.
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How to make a TPD claim
Making a TPD claims can be a complex and time-consuming process. It usually begins with lodging forms for a claim through the superannuation fund in which the policy is held (or directly with the insurer for a stand-alone policy). After an initial assessment, the fund will forward the claim to the insurer to see if the claim meets its criteria for acceptance.
The insurer will require a lot of information. Medical records, workers’ compensation documentation and various other evidence of the claimant’s disability, whether physical or psychiatric, must be furnished in support of the claim. The illness or injury that caused the disability does not need to be work related and covers any illness or injury that means a person can’t work. It’s important to fill out the required paperwork as thoroughly and accurately as possible to expedite the claim and avoid back-and-forth with the insurer.
The object of the evidence provided is to assist the policy-holder to show they can no longer work in their job, or another job based on their education, training and experience. A written submission arguing why the claim should be accepted is also advisable. Expert lawyers can help draft this correspondence.
Should the claim not be accepted, it is possible to appeal the decision. TPD claims generally take up to 12 months to finalise, though often the claimant’s super fund will also need to approve the claim, which can lengthen the process. It’s also possible to make multiple TPD claims if multiple policies are held in different superannuation funds. It’s worth noting a TPD claim can be made long after a person stops work.
An accepted TPD claim will generally be paid as a lump sum to meet living and medical expenses into the future. A claim made through a TPD policy held within a superannuation fund will pay a lump sum, in addition to the amount in the fund.
Time limits and the need for expert legal advice
The complexity of TPD policies, including exclusions which render a policy-holder ineligible and the extensive information required to make a claim, mean discussing TPD insurance with compensation law specialists such as ROC Legal is vital.
Insurance companies will often reject TPD claims by asserting that the claimant is still able to work in some capacity. But our professional team can help overcome the challenges involved in making a claim, collecting information and dealing with insurers and superannuation trusts where required. Making a TPD claim can be a stressful experience but our understanding team can help make the process as trouble-free as possible, so contact us as soon as possible to discuss your case.
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Find out if your injury or illness is eligible to make a compensation claim. Your online check only takes 3 minutes.