Eligibility rules vary greatly between TPD insurers, so confirm your policy's specific conditions first.
The claims process involves five key steps and typically takes 2 to 6 months to complete.
TPD payouts through super are often taxed upon early withdrawal, unlike direct insurer payments.
Suffering a serious injury or illness is stressful enough – don't let the total and permanent disability (TPD) claims process add extra pressure. This guide will help you understand when and how you can lodge a TPD insurance claim, so you know exactly what to expect and you can ensure the claims process is as smooth as possible.
What is a TPD claim?
TPD insurance provides a lump-sum payment if you ever suffer a serious injury or illness and are no longer able to work. The claims process can be lengthy, because insurance companies want to be certain that a disability is total and permanent, before providing the lump sum.
Finder survey: How many Australians have lied on their TPD insurance policy?
Response
I've never lied on an insurance policy
96.7%
I lied on my current policy
2.2%
I've lied on a past policy
1.1%
Source: Finder survey by Pure Profile of 1110 Australians, December 2023
Am I eligible to make a TPD claim?
There are a few basic conditions you'll have to meet before you become eligible to make a TPD insurance claim. The specific criteria varies between different insurance companies and individual policies.
It's worth checking with your insurance company to find out what requirements you have to meet, before making a claim. We've listed a few common variations in the table below:
Requirement
Variations between insurers
Your disability is total and permanent
You're unlikely to return to any type of work
You're unlikely to return to your previous role
You have lost a limb or suffered a serious injury
You've met the waiting period
Some conditions don't have a waiting period
You've been off work for at least 3 months
You've been off work for at least 6 months
You can prove work history
You were employed full-time for at least a year before the claim
You were in full-time employment when the claim was made
You were working a set number of hours before the claim was made
You've lost some independence
You can show you're unable to perform two to three daily living activities, such as using the bathroom or washing yourself
You're complying with ongoing medical care
You must maintain regular appointments, advice and care of a medical specialist
You must be under regular care of a medical practitioner
You must be undergoing, or have undergone, rehabilitation
How do I make a TPD claim?
The exact claims process varies between insurance companies and different super funds. However, in general, this is usually how it works:
Contact your insurer or super fund.
Tell the company about your intention to make a claim and find out what evidence you'll need to provide.
The exact process varies, but a member of the claims team will be able to walk you through next steps. You may be assigned a case manager at this point.
Submit your claim.
Fill out any forms provided and include evidence of your condition. Medical reports and employer information, along with relevant statements, should be included.
Once you've passed this onto your case manager, they'll keep you up to date throughout the process, and let you know whether you need to provide anything else.
Your claim is assessed.
The insurer will decide whether you are eligible for a claim. In some cases, the insurer may request further evidence, such as a second opinion, or further medical exams.
An initial decision is made.
After assessing the information, the insurance provider will accept, defer or decline your claim.
Respond.
You may be given an opportunity to provide more supporting information if the claim is initially rejected. You can also lodge an appeal if you don't agree with the decision.
Accepted: The benefit will be paid and your insurer will be in touch to finalise payment details.
Deferred: Further assessment is required so your payment will be delayed.
Declined: You have not satisfied the conditions of the policy and will not receive payment.
Did you know? If you have TPD insurance with more than one super fund, you might be able to claim multiple benefits. Contact your funds directly to find out how they handle multiple benefits.
Claiming TPD bundled with life insurance
If you have bundled a total and permanent disablity policy with a life insurance policy, a TPD payout will reduce your overall life insurance cover. For example, say you were to take out $1.5 million worth of life insurance cover and combine it with $500,000 TPD insurance.
If you suffer an accident and become disabled, you will receive $500,000 for a successful claim, and your TPD cover would then end. However, this will now mean that your life insurance cover amount will be reduced by this amount, which in this case brings it to $1 million.
How long does a TPD claim usually take?
A straightforward TPD claim shouldn't take more than 2-3 months to be completed, while more complex cases may take around 6 months. Unfortunately, difficult and contentious cases can take years to settle.
If your claim is taking too long, you may want to consider lodging an internal complaint to the insurer or superannuation fund, or to the Australian Financial Complaints Authority (AFCA). You may also want to consider hiring a lawyer who specialises in TPD claims.
What's the difference between "any" and "own" occupation?
Your likelihood of being able to make a TPD claim may largely depend on whether you have insurance for any occupation or own occupation.
Type
What it means
Any
You'll receive a benefit if your injury or illness stops you from working in any occupation. This is typically the cheaper option, but it's harder to make a successful claim.
Own
You'll receive a benefit if you're unable to work in your own occupation. This is more expensive, but can be easier to prove when it comes to claim time.
If TPD insurance is through your super: The benefit isn't taxed when it's initially credited to your super account. However, if you withdraw the money from your super early – which means before the age of 60 for most people – it is subject to tax.
The effective tax rate on withdrawal can vary between less than 1% to over 18%. In fact, a person with multiple TPD claims may have a different tax rate on each one.
If TPD insurance is through an insurer: The benefit is not taxed. Your premiums were subject to tax, so you don't pay tax on the payout. Easy.
How to get a TPD claim approved
The best way to get a TPD claim approved is by providing as much information as possible and cooperating with your insurance company.
You may have to comply with post-injury or post-illness medical requirements. For example, your insurance company may require ongoing rehab or specialist appointments.
Remember, you have a duty of disclosure when lodging a TPD claim. That means you have to tell the company any information that's relevant to the outcome of your claim.
Can I claim TPD for partial disability?
Although TPD insurance refers to total and permanent disability, some insurance companies will provide a payout for partial disabilities.
This means you'll have cover for any income lost if you can only work at a reduced capacity because of sickness or injury.
Benefits may be paid out under the following options:
Hours-based. You'll receive benefits if you can't work as many hours. To qualify, you'll need to earn less than you did before your disability and be under medical care.
Duties-based. You'll receive benefits if you're unable to perform all the duties essential to your previous job and are making less money as a result.
Some policies will also provide partial payment if you suffer certain disabilities. This may include loss of limbs or loss of sight.
Could my TPD claim be disputed?
In some cases, your TPD insurance claim may be disputed. This means your insurance company might not pay your claim. There are a few reasons why this might happen:
Varied definitions. There is no standard definition of TPD. Your insurance company might not agree that you are totally and permanently disabled.
Ongoing requirements. Some TPD insurance policies will only pay out if you follow ongoing specialist advice or even a rehabilitation program.
Waiting periods. Some policies enforce waiting periods before a payment is made. This means you might not be able to access your benefit immediately.
Exclusions. TPD insurance doesn't cover everything. If you're totally and permanently disabled due to a pre-existing medical condition, you might not receive the benefit.
What could I do if my TPD claim is denied?
It's possible that your TPD claim might be denied. If that happens, there are still measures you can take to get your case reassessed.
Understand why you were denied. If your claim is rejected, your insurance company has to tell you why. Understanding the company's reasoning is the first step to forming a strong counter-argument.
Put together your case. Gather evidence that proves your insurer was wrong to reject your case and supply any supporting evidence. Perhaps your insurer declined your claim because it believed the illness was pre-existing, but a doctor disagrees.
File a dispute with the insurer. Your insurer will have an internal dispute resolution process (IDR). Send your case to your insurer's resolution department and it will be reviewed by a team which did not initially handle your case.
Wait. Insurers have 45 days and super funds have 90 days to make their final decision, although they do have to communicate with you at reasonable intervals during that time.
If things still don't work out:
Talk to AFCA. Lodge a complaint with the Australian Financial Complaints Authority (AFCA).
Take legal action. There are law firms that specialise in having TPD claims approved.
FAQs answered by Claimify Legal Manager Jake Gardiner
What are some common things to watch out for when making a TPD claim?
Multiple funds. It's critical to first check whether you have multiple funds or policies. You can do this by checking your ATO account or calling the ATO.
Waiting periods. Every super fund's policy is different. Some of them have a mandatory waiting period of 3 to 6 months before you can lodge a TPD claim.
Payments. Should you lodge a claim and it is successful, you may not necessarily be paid a lump sum of your total TPD benefit. Something to be mindful of is that some super funds prefer to pay the claimant in yearly installments. This allows them to reassess your circumstances to ensure you're still eligible to receive those funds over a number of years.
Are there some common traps that people fall into, or things people forget when making a TPD claim?
Fine print. Always make sure you read the fine print when choosing your super fund and policy because there are some things that may not be obvious when you sign up. For example, there are some exclusions that may apply to your policy, such as pre-existing medical. These can have an impact on your ability to claim.
Qualifying for TPD. Depending on your policy, your occupation type may determine the level of impairment you must demonstrate to qualify for a TPD payment.
Permanent injury. Your inability to work needs to be permanent. You cannot claim TPD if you will only be unable to work for a short period of time. Workers' compensation may be a good option for those people who are temporarily unable to work.
Early access to super fund. TPD can only be claimed where you have ceased work for medical reasons. You cannot make a claim for unemployment as a result of non-health-related factors, such as redundancy. Recently many people have been confused between accessing their super early (an initiative by the Government in response to redundancies due to the Covid-19 pandemic) vs a TPD claim through their super.
Any tips on making a TPD claim?
Check your paperwork to know who your fund is. You must be a member of the fund and have insurance cover at the date you ceased work.
Always discuss your injury with your GP soon after it has occurred. Without documentation from a GP, it will be difficult to establish that you are TPD.
It's crucial to confirm the date you last worked. This is imperative in determining whether you're eligible for a TPD claim, as you must be covered for TPD as of this date. Additionally, the amount you are insured for is usually calculated based on the date you last worked.
Seek out free advice from a lawyer. They will be able to tell you whether you're eligible for a claim and advise of any documentation you will need to support your claim.
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TPD claim story: 'I could only receive half of what I was promised'
"I wish I had known sooner - Julia, 57"
Julia is a former ambulance officer from Queensland. She had TPD insurance through her super fund, and made a claim in 2016 as she was suffering from fibromyalgia.
In the two years leading up to the claim, Julia had also been suffering from PTSD. When she finally lodged the TPD claim for her fibromyalgia, she was expecting to receive $450,000.
However, after undergoing an 18-month claims process, Julia was surprised to learn she would only be receiving $300,000 in disability cover.
"They told me I could only receive $240,000 because of my age, which is almost half of what was promised," Julia told Finder. "Then they said they would backdate the payment to 2015, so I would receive 300,000."
Finder contacted Julia's super fund and confirmed that the value of the potential TPD benefit policy does reduce as you get older, but the payment will be backdated to the date of the claim.
"Make sure you check if your cover diminishes as you get older," Julia added. "Age reduces cover and it's something I wish I had known sooner."
It's not the only advice Julia has for anyone else going through a TPD claim – she also urged other policyholders to be well-prepared for any insurance-mandated medical assessments.
"Be aware of the independent medical assessments, especially those provided by the insurance company," she said. "Demand taking in a support person who can witness and verify what he or she said."
Frequently asked questions about TPD claims
Once your TPD claim is approved your insurer will contact you to finalise payment details. The lump sum benefit will usually be paid into your nominated bank account, or if the policy is held through superannuation it will first be transferred to your super fund before you can apply to access it. Be aware that accessing superannuation early may have tax implications.
TPD insurance is designed for those who are totally and permanently disabled and unlikely to return to work. If you receive a TPD payout it is generally understood that your ability to work is severely limited or non existent. However, if your circumstances change and you attempt to return to some form of work this may lead to an insurer reassessing your claim or even seeking repayment of benefits particularly if it contradicts the information provided during the claim process. It is best to seek independent financial and legal advice before attempting to return to work after a TPD payout.
A TPD lump sum payment can impact your eligibility for Centrelink payments such as the Disability Support Pension. Centrelink has income and asset tests that may be affected by a significant payout. It is advisable to contact Centrelink directly or seek financial advice to understand how a TPD payout could affect your specific benefits.
Yes, there are generally time limits to make a TPD claim. These can vary depending on your policy and whether the cover is held through superannuation. For TPD claims linked to super you typically have a certain period after ceasing work due to illness or injury to lodge a claim. Some policies may have a 'look back' period allowing claims for disabilities that occurred while you had cover, even if you are no longer employed. It is important to check your specific policy documents or contact your insurer or super fund as soon as possible after your disability occurs.
To support a TPD claim you will need comprehensive medical evidence. This usually includes reports from your general practitioner, specialist doctors (such as orthopaedists, neurologists or psychiatrists) and any other relevant medical practitioners. Evidence should detail your diagnosis, treatment history, prognosis, the extent of your disability, and how it prevents you from performing work. Objective medical test results, hospital records and rehabilitation reports are also crucial. The more detailed and consistent your medical evidence the stronger your claim will be.
Yes, it may be possible to claim TPD if you are self-employed or a freelancer but the eligibility criteria can be more complex. Insurers will typically assess your ability to perform the essential duties of your previous occupation or any occupation based on your policy type. You will need to provide evidence of your work history income prior to your disability and how your illness or injury prevents you from continuing your self-employment. This might include tax returns, business records, client invoices and statements from peers or clients. It is crucial to check your policy's specific definition of "work" or "occupation" for self-employed individuals.
Generally, the insurer will cover the cost of any independent medical examinations or specialist reports they specifically request as part of their assessment process. You are usually not expected to pay for these assessments. However, you may be responsible for the cost of your own treating doctors' reports or any initial medical evidence you gather to support your claim. Always clarify with your insurer upfront who is responsible for the costs of specific examinations.
Not necessarily. While your TPD policy states a maximum insured amount, the final payout can sometimes be less. Factors that may reduce the payout include your age at the time of claim (as some policies have diminishing cover with age), or if the insurer assesses your total and permanent disability as falling under a partial disability clause. If your policy is held through superannuation the payout may also be subject to tax if you withdraw it before age 60. It is vital to review your policy's terms and conditions carefully, particularly regarding age-based reductions or specific disability definitions.
Nicola Middlemiss is a journalist with nearly a decade of experience in personal finance and insurance. She has contributed to Domain, Yahoo Finance, Money Magazine and Insurance Business Australia, offering in-depth insights into commercial insurance in the Australian market. Nicola holds a Bachelor’s degree in English from the University of Leeds and a Tier 1 General Insurance (General Advice) certification, which complies with ASIC standards.
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James Martin was the insurance editor at Finder. He has written on a range of insurance and finance topics for over 7 years. James often shares his insurance expertise as a media spokesperson and has appeared on Prime 7 News, Insurance News, 7NEWS and The Guardian. An experienced journalist, James' work has featured in publications including The Irish Times, Companies100 and In Business. He holds a Tier 1 General Insurance (General Advice) certification and a Tier 1 Generic Knowledge certification, both of which meet the requirements of ASIC Regulatory Guide 146 (RG146).
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Any occupation cover and own occupation cover are two types of cover that apply to Total and Permanent Disability Insurance (TPD) and Income Protection Insurance
Is TPD insurance tax-deductible? Do I need to pay tax if I receive a payout? Find out how TPD insurance is treated.
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