“TPD” – you’ve heard people talk about it but you’re not really sure what it is, or perhaps you’ve seen premiums being deducted from your superannuation account and you’re too afraid to ask about it.
Look no further. We’re here to help. This week on the blog, we cover all things TPD.
What is a TPD claim?
Total and Permanent Disability (TPD) Insurance cover exists to compensate you if you’ve been injured or become unwell to the point you can’t work anymore.
Most people insure themselves against it through their superannuation as part of a disability or life insurance policy. You may have manually set this up when you joined your super fund or have been signed up to the default level of cover.
Unlike other compensation claims, a TPD claim doesn’t require anyone to be at fault. The term “disability” isn’t limited to physical disabilities. Claims can be made for anything that stops you from working, including:
- Permanent work injuries, like back or shoulder injuries
- Degenerative diseases
- Chronic pain
- Mental illness
- Acquired brain injuries
What can I claim?
A TPD insurance claim usually involves a lump sum payment made to you if you meet the policy criteria. The amount depends on your cover. Contact your superannuation provider to find out how much your TPD insurance payment is worth.
To be eligible to make a claim you will need to have been disabled continuously for a minimum of three to six months as a result of an injury or illness. But each insurer defines “total and permanent disablement” differently, and often in one of two ways:
1. Any occupation or Standard cover – This is when you are unlikely to be able to work again in any occupation that you are trained, educated, or experienced in
2. Own occupation or Occupation specific cover – This is when you are unlikely to be able to work again in your usual occupation
You should also be aware that TPD policies have exclusions. This means if you told your insurer about a pre-existing condition like a back injury, they might exclude all back conditions from your cover.
So, if the reason you can’t work anymore is because of a back injury, you may not get a payout under your TPD policy (although you may be entitled to another type of personal injury compensation claim).
Does it affect my superannuation balance?
No. Although the insurance may be provided by your superannuation fund, the payout you receive is not an advancement of your own funds.
It’s a payout from a separate policy, so you can claim no matter how little or how much is in your super, provided you have an active policy. It won’t affect your super balance, or your entitlement to draw on these funds when you’re ready to retire.
If you have multiple superannuation funds, you may have multiple TPD insurance policies – and you may be able to make a claim on all of them at the same time.
How long will it take?
The Life Insurance Code of Practice states that insurers have to decide on TPD insurance claims within six months, but this can take as long as 18 months if it’s a complex claim. Smith’s Lawyers’ average time for a TPD claim is between six to nine months.
Waiting for your claim to be investigated can be overwhelming, as there are usually a number of factors to consider and you might need to go back and forth with your insurer for a while.
You might also need to prepare for rejection from your insurer. According to ASIC, more TPD claims are declined than any other type of superannuation insurance like death, trauma, or income protection.
A report by APRA showed that in 2019/20 82 per cent of rejected claims were declined because the contractual definition wasn’t met. This doesn’t necessarily mean they weren’t eligible, but there simply might not have been enough evidence.
That’s where we can help.
Do I need a lawyer to make a TPD claim?
If your diagnosis is straightforward, and you complete your paperwork properly, then you shouldn’t need a lawyer.
But if your original claim is rejected, or you’re unsure if you meet the policy definitions, talking to a lawyer can help. In fact, using a specialist lawyer to submit your TPD insurance claim can get you your payout faster than going directly through your insurer.
At Smith’s Lawyers, we can help you understand your policy, including what cover you have, what exclusions apply, if your medical condition fits, and we can let you know what your claim might be worth.
Talk to us today.