None of us truly know what the future holds which is one of main reasons insurance policies exist. In the terribly unfortunate event that you are left ‘totally and permanently disabled’ (‘TPD’) due to illness or injury, and unable to work again, TPD insurance is a policy that once claimed, can help financially support you potentially through the rest of your life.
Many people already hold a TPD insurance policy bundled with their superannuation fund. If not, you can separately purchase TPD insurance through an insurance company, a financial adviser or an insurance broker.
TPD insurance policies vary in cost depending on what you are being covered for. Most such policies fall into one of two categories: ‘your own occupation’ policies that cover you if you’re unable to work again in the job you were working in before your disability; and cheaper ‘any occupation’ policies that cover you if you’re unable to ever work again in any job suited to your education, training or experience.
Both people with TPD insurance and those thinking about it are not always aware of their entitlements under such a policy. Does the injury or illness have to be work related? Can you still make a TPD claim if you’re also making a workers’ compensation claim? What about if you’re receiving a Centrelink Disability Support Pension?
All of these questions can be answered by our team at Lifestyle Injury lawyers to ensure you get the best possible result from a TPD claim but in the meantime, we’ll try to briefly answer some of them in this article.
What is required to set up TPD cover?
TPD insurance can be a separate policy or bundled with life insurance. In some cases the life cover can be reduced by any amount paid out on a TPD claim. A legal professional can check the Product Disclosure Statement to see whether this is the case.
Before signing on the dotted line, or when you renew or change your cover, it’s important to let the insurer know of anything that might be relevant to their decision to provide you TPD insurance. An insurer will ask for you to provide your age, occupation, medical history, family medical history, your lifestyle (smoking, level of drinking, etc), and high risk sports or hobbies.
The information you disclose during this process must be honest and accurate otherwise the insurer may later decline paying out on a claim you make under the policy. This information, once accepted, will be used to set the amount of your premiums and the other terms and conditions of your policy.
TPD insurance premiums are generally either: ‘stepped’ premiums, recalculated each time the policy comes up for renewal and increasing each year because as you age, your chance of a claim increases; and level premiums, where a higher premium is charged at the outset of the policy, but further increases in costs occur more slowly over time because they aren’t based on your age.
There are many different TPD insurance offerings, whether as part of a super fund or as an individual policy. For any of them, it’s essential to check whether the policy covers ‘your own occupation’ or ‘any occupation’, what exclusions there are for which you’re not covered, the waiting periods before you can claim, and the premiums now and into the future.
Making a TPD claim
Should you not be able to work anymore as a result of injury or illness and then make a successful TPD claim, you will usually be paid a lump sum to meet your living and medical expenses into the future. If you make the claim through a TPD policy as part of your superannuation fund, the lump sum is additional to the amount you have saved as superannuation.
As discussed above, in order to make a successful claim you will need to be able to show you can no longer work in your job, or another job based on your education, training and experience. Some policies will also require you to show that you can’t be retrained for a different type of job to one you’ve held before.
All TPD claims take account of your personal circumstances in assessing how much you can claim. The amount that can be claimed will usually depend on your age and the conditions of the policy. It should be noted that if you have more than one super fund, you might be able to make more than one TPD claim.
The illness or injury that caused your incapacitation does not need to be work related and covers any illness or injury that means you can’t work.
If your incapacitating injury has been caused by a work-related or vehicle accident, for example, you may still be able to make a TPD claim in addition to any workers’ compensation or compulsory third party motor vehicle accident claims.
Those on the Centrelink Disability Support Pension (DSP) may still be able to make a TPD claim, particularly where the policy is part of a still-active super fund. This may be particularly important given the Federal Government have raised the bar on being able to claim the DSP.
Time limits, unsuccessful claims and legal advice
Claims on TPD policies are different to usual insurance claims in that you may still be able to claim long after you had to stop work. But this may also depend on whether you made ongoing contributions to keep the policy ‘alive’, which can sometimes be an issue. Also, time limits may apply if your claim is first rejected, or a decision has been made and you are seeking a review.
It’s always wise to remember that your interests and those of the insurer are not the same. Insurance companies will often reject TPD claims because they believe the claimant can still work, if not in their old job then some other job. If your TPD claim is rejected, there are avenues of appeal through your super trustee (if that’s where the policy resides), or through the Superannuation Complaints Tribunal and the courts for individually held policies.
Seeking the guidance of expert and experienced superannuation and insurance lawyers such as Lifestyle Injury Lawyers in this complex area of the law is the sensible course. We know working your way through a claims process is a stressful time for anyone, and can make sure it’s as smooth and trouble-free as possible to give you the best chance of success.