Total and Permanent Disability Insurance: Everything You Should Know

Permanent Disability Can Happen, It’s Better To  Be Ready 

One moment, you are living life as usual, the next, an accident or illness changes everything. From a severe injury from a car accident to a degenerative illness that strips away your ability to work, financial stability becomes an immediate concern. This is where Total and Permanent Disability (TPD) insurance comes in. A financial safety net designed to support Australians facing life-changing circumstances. 

From a legal standpoint, TPD insurance is a contractual entitlement often linked to superannuation funds or held as a separate policy. However, claiming these benefits is not always straightforward. Insurers and super funds assess claims based on strict definitions, requiring medical and occupational evidence to establish that you are permanently unable to work in your ‘own occupation’ or ‘any occupation’ for which you are reasonably qualified. 

The legal process involves proving eligibility, navigating policy exclusions, and addressing insurer disputes. Many claims face delays or rejections due to insufficient medical evidence, disputes over work capacity, or failure to meet policy criteria. Engaging a lawyer experienced in TPD claims can significantly improve your chances of success by ensuring that all necessary documentation is presented effectively, challenging unfair decisions, and negotiating with insurers on your behalf. 

Knowing your legal rights, claim deadlines, and potential disputes is essential to securing your financial stability. But what exactly does TPD insurance cover, and how can you maximise your chances of a successful claim? We have outlined the entire process for you, broken down step by step: 

What Qualifies as Total and Permanent Disability? 

TPD insurance is designed for individuals who can no longer work due to a permanent condition. This could be physical (such as paralysis, loss of limbs, or severe spinal injuries) or mental (such as chronic psychological disorders). The eligibility criteria often vary depending on the insurer, but common requirements include: 

• A medical professional certifying the condition as permanent. 

• The inability to return to any gainful employment. 

• Proof that treatment and rehabilitation have been attempted. 

The definition of TPD varies between insurers, but the two main categories are: 

• Any Occupation: You must prove you cannot work in any job suited to your education, training, or experience. 

• Own Occupation: You must prove you cannot work in your specific profession. This option often has higher premiums but offers more protection. 

How much TPD costs? 

The monthly cost of Total and Permanent Disability (TPD) insurance in Australia varies based on factors such as age, occupation, and the amount of coverage. For example, a 30-year-old male non-smoker might pay approximately $5 per week (around $21.67 per month) for $500,000 in TPD coverage. 

In another instance, AustralianSuper provides TPD cover where a 30-year-old member might have $61,000 in TPD cover at a cost of $0.77 per week (about $3.34 per month). On average, individuals in their 20s may pay between $28 to $48 per month for TPD insurance.  

These examples illustrate that premiums can range from as low as a few dollars to several tens of dollars per month, depending on the provider and level of cover. It’s advisable to compare policies from different insurers to find coverage that aligns with your needs and budget. 

How Much Can You Claim? 

The maximum payout for TPD claims varies significantly. Payouts can range from $50,000 to over $3 million, depending on factors such as: 

• The sum insured in your policy. 

• The severity of your condition. 

• Your ability to work in any capacity. 

Many Queenslanders assume they are adequately covered through their superannuation, only to find that their payout is much lower than expected. This is why reviewing and possibly increasing coverage is essential. 

Making a Total and Permanent Disability Insurance Claim in Queensland 

Who to Contact to Make a Claim 

Your first step in making a claim is knowing where the policy originated. Did you take it out yourself? Was it bundled into your superannuation? Or was it offered through your employer? 

Talk to a lawyer first 

If you are making an insurance claim, you are likely going through one of the most challenging times in your life. You may be unable to work, facing mounting expenses, and relying on this payout to secure your future. Yet many claimants are blindsided when their insurer disputes or delays their claim, sometimes for months, even years.  

A lawyer who specialises in insurance claims helps you avoid common pitfalls, push back against unfair denials, and fight to get you what you are entitled to. The earlier you seek legal advice, the stronger your case will be. 

If you bought the policy directly from an insurer, contact the insurance company.

Many people assume that since they’ve paid their premiums on time, their insurer will pay out just as smoothly. Unfortunately, this is not always the case. 

Insurance companies are businesses first and foremost, and their goal is to pay out as little as possible. Be sure to gather all necessary documents and evidence before submitting your claim and keep detailed records of all communication. If you receive a rejection letter, do not take their word as final.  

If you used an insurance broker or financial adviser, reach out to them first. But remember, their role is limited.

A broker or adviser may have helped you set up your policy, and they can clarify what coverage you have and assist with the initial claim process. However, they work within the system and may not be able to challenge an unfair rejection. 

If your insurance is part of your superannuation, contact your super fund. 

Many people are not aware they have Total and Permanent Disability (TPD) insurance included in their superannuation until they need it. While super funds manage these policies, they don’t always act in your best interest, and the claims process can be frustratingly slow.  

They may request excessive documentation or use complex criteria to deny your claim. If you are struggling to get answers or facing unreasonable delays, seeking legal advice helps keep them accountable and ensure you receive the benefits you’ve paid for. 

If it was provided through your employer, speak to HR or payroll.

Some employers offer group insurance as part of their benefits package. While HR or payroll can confirm your coverage and direct you to the insurer, they have no control over how your claim is processed or whether it’s approved.  

If your employer-based policy is giving you the runaround, don’t wait, get professional advice to prevent the situation from escalating. 

Making a claim can feel overwhelming, especially when you’re already dealing with a difficult situation. Insurers often count on people giving up or accepting less than they deserve, but you don’t have to settle.  

What You Need to Provide 

The claims process is straightforward. If you have the right documents. Insurers will require specific paperwork to assess your claim. Depending on the type of insurance, you may need: 

• Medical reports and test results from your doctor. 

• Details of your work duties and income (payslips, tax returns, or financial statements if self-employed). 

• A death certificate or medical cause of death report if claiming after a loved one’s passing. 

Here’s where many claimants hit a roadblock: Insurers may request additional documentation or even an independent medical examination. This can feel invasive and frustrating, especially when you’re already dealing with emotional and financial stress. Having a lawyer guide you through this stage can ensure you provide exactly what’s needed, minimising delays. 

How Long Will Payout Take? 

Timing is critical. You don’t want to be waiting months for a payout when bills are piling up. When it comes to Total and Permanent Disability Insurance, insurers are required by the Life Insurance Code of Practice to make a decision within: 

• 2 months for income-related claims (after the waiting period has expired) 

• 6 months for all other claims 

However, in reality, delays can occur. If an insurer isn’t meeting its obligations, you have the right to complain. A good lawyer will ensure they follow through within the required timeframes and escalate the matter if necessary. 

For Queensland residents, the Life Insurance Claims Comparison Tool (provided by the Australian Securities and Investments Commission) can help you understand average claim times for different insurers. 

What If Your Claim Is Denied? 

It happens more often than you’d think. Common reasons include: 

• Lack of medical evidence supporting permanent disability. 

• The insurer claims a pre-existing condition wasn’t disclosed. 

• Insufficient evidence was provided to support the claim. 

• The insurer arguing the claimant can still perform another type of work. 

• Exclusions in the policy (such as pre-existing conditions). 

• Failure to meet waiting periods specified in the policy. 

• Incomplete or incorrectly submitted paperwork. 

If your claim is rejected, do not accept it at face value. You have the right to challenge the decision. Start by lodging a complaint with the insurer or super fund. They are required to review it. If you’re still not satisfied, escalate it to the Australian Financial Complaints Authority (AFCA), an independent dispute resolution service. 

What to Do If You Need Urgent Financial Help 

A common issue I see is clients struggling to make ends meet while waiting for their claim to be processed. If this is your situation, there are options: 

• Ask your insurer to expedite the assessment due to financial hardship. 

• Request an advance payment to cover immediate expenses. 

You will need to provide supporting documents like bank statements or Centrelink statements. Be aware that any advance payments will likely be deducted from your final claim amount. 

Getting the Support You Deserve 

Filing a Total and Permanent Disability insurance claim means taking a crucial step toward financial stability during one of life’s most challenging times. If you are feeling overwhelmed, don’t go through it alone. A trusted lawyer can help ensure your claim is handled fairly and efficiently, so you can focus on what truly matters: your health, your family, and your future. 

For more guidance, visit reputable sources like: 

• Moneysmart.gov.au (ASIC’s financial advice website). 

• Australian Financial Complaints Authority (AFCA) for dispute resolution. 

• Your superannuation fund’s website for specific policy details.