What is TPD Insurance?
TPD insurance is Total and Permanent Disability insurance, which assists eligible claimants with a lump sum payment in the event they have suffered an injury or illness that will prevent or is preventing them from returning to work in their pre-injury or pre-illness capacity. It is also often referred to as a Disability Insurance Benefit.
You may already be covered by TPD insurance without even realising, as it is usually provided under your superannuation. However, it is always best to check if you are covered before simply assuming that it is part of your superannuation. If you are covered under your superannuation, it is also important to keep an eye on your balance, as if your account lays dormant and fees eat into the balance, your cover may be terminated due to non-payment of your premiums.
Who is eligible to make a claim?
Generally speaking, to be eligible for a TPD benefit, you must be able to prove that you are permanently unfit for your regular job, or any other form of employment for which you would qualify for based on your education, training and experience.
Let’s say you have only ever worked in jobs that required manual labour. Even if you were deemed fit enough to work in an office job, if you did not possess the education, training and/or experience to undertake an office job, you may be eligible for a TPD benefit.
Your injury or illness does not need to be work-related to be eligible to claim TPD insurance. It may be that you have been in a motor vehicle accident or begun suffering from an illness that now prevents you from working.
The eligibility for making a TPD insurance claim is dependent upon the requirements set out in your individual policy.
Each insurer’s requirements will be different however, TPD insurance policies will generally stipulate that:
- the insured must have been continually absent from work for a minimum of six months;
- the insured must have been absent due to injury or sickness;
- the insured must have passed the waiting period on the policy before making a claim;
- a medical practitioner must be overseeing the care of the insured (some policies require two medical professionals confirm that the insured is unable to ever return to work); and
- an opinion as to the likelihood of the insured never returning to work be formed by the insurer.
As the process of submitting a claim can be complex and the time between submitting and receiving your benefit can be lengthy, it is recommended that you seek advice from an insurance lawyer to ensure that you submit the most comprehensive claim possible so you do not miss out on any funds you may be entitled to.
How much is the TPD benefit?
The payout figure for a TPD benefit varies from claim to claim and is assessed on the individual circumstances. Successful claimants can have their TPD benefit paid as a lump sum or yearly instalments.
The benefit payment can be used to pay for medical costs (both current and future), provide the insured with a source of income and/or be used to clear any debts that may have accrued while the insured was waiting for their claim to be assessed.
What if my TPD claim is rejected?
Rejected TPD insurance claims occur most commonly because the insurer or superfund believes that the insured maintains the capacity to continue working or return to work.
It is possible to dispute the decision to reject a claim by contacting the Financial Ombudsman or commencing proceedings in the District Court, Supreme Court, Federal Court or at the Superannuation Tribunal.
If you have had your claim for TPD insurance rejected, contact one of our compensation lawyers in Cairns to find out how we can help.