Total and Permanent Disability (TPD) Insurance Claims

claims-tpd

Need to make a claim on your policy? Follow our guide to making a successful total and permanent disability claim in Australia.

If you are planning on getting total permanent disability (TPD) cover, it is crucial that you understand the conditions around claiming TPD in Australia. The process of submitting a claim to actually receiving a benefit payment can be a lengthy one if you don't follow the necessary steps.

Three things you need to consider before making a TPD claim:

  1. Make sure you understand the reasons why a TPD claim could be disputed.
  2. Make sure you check if you're eligible to make a claim.
  3. Make sure you follow the appropriate steps, depending on whether your TPD is included inside your super fund or a standalone policy.

Why are TPD claims disputed?

finder.com.au is a comparison service and not an insurer. For clarification on whether you are eligible to receive a claim, please refer to your product disclosure statement or contact your insurer. If you are having issues with a claim or feel your insurer has treated you unfairly, you will need to contact your insurer and go through its dispute resolution process. If after this process you’re still not satisfied, you can contact the Financial Ombudsman Service.

Am I eligible? Click on the buttons below to jump to the appropriate section

When can I make a claim?

You can make a TPD claim if you satisfy the conditions set in the policy by the insurance company or super fund that holds your cover. This usually involves showing that you're no longer able to work. Insurers will typically look at the following criteria when assessing TPD claims. Note that criteria will vary from insurer to insurer.

Understand your insurer's criteria

  • It is extremely important that you are clear on what your policy requires in order for you to make a claim as well as the definition your policy falls under to avoid any surprises in the event of a disability.

What criteria is used to assess my claim?

The criteria that insurers use to determine eligibility for payment include the following:

  • 1. Level of disablement

Some insurers will require a minimum level of disability. They will also look at the likelihood of you recovering from the disability.

  • 2. Did you buy cover inside super?

A TPD policy inside of superannuation will only cover an any-occupation disability. A TPD policy outside of superannuation may cover both own-occupation and any-occupation disability claims.

  • 3. Own or any occupation?

Your TPD cover will typically fall under either an own-occupation cover or any-occupation cover. You'll need to meet the definition of your policy to be eligible for a claim.

  • Own occupation. This is when you are unlikely to ever return to full-time work in your previous job.
  • Any occupation. This is when you are unlikely to ever be able to engage in any form of regular paid work again. This form of disability is harder to prove.
  • 4. Waiting periods

There is usually a minimum waiting period from the time you apply before you can make a claim.

  • 5. How long have you been working?

Some insurers require you to meet a minimum level of work before you're eligible.[/fin_tab]

  • 6. Your ability to perform daily activities of living

For some policies (e.g. living expenses cover), you're required to demonstrate an inability to perform a certain number of daily living activities. Daily activities can refer to the following:

  • Bathing or showering
  • Eating and drinking
  • Using the toilet
  • Dressing and undressing
  • 7. Ongoing medical care

Some policies require you to show ongoing medical care to improve your condition or to prevent further illness.

How does criteria vary between insurers?

The following chart highlights the various criteria that different insurers may have before accepting your claim.

CriteriaCommon variations between insurers*
The extent of your disability
  1. You're unlikely to return to any type of work.
  2. You're unlikely to return to your previous role.
  3. You have lost a limb or suffered a serious injury.
Own vs any occupation
  • Own occupation. The definition of "current occupation" will vary. For example, if a piano player suffers a hand injury and can no longer perform professionally but can still teach piano, some insurers might classify teaching as the same occupation while others may consider it to be different.
  • Any occupation. The definition of "any occupation" also varies. Medical advances, such as prosthetics and similar advances in the workplace, can make an insurer less likely to classify someone as unable to work in any job.
Waiting periods
  1. Three month continuous absence from work
  2. Six month continuous absence from work
  3. No waiting periods for some conditions such as major head trauma
Minimum work history 
  1. Show 12 months of employment before a claim can be made
  2. Full-time employment
  3. Not full time but with minimum hours
Loss of independence
  1. You have to show that you are unable to perform 2-3 daily living activities.
  2. Evidence in the form of a diary may sometimes be required.
Ongoing medical care
  1. Regular appointments, advice and care of a medical specialist
  2. Regular care of a medical practitioner
  3. Rehabilitation

*This is not an exhaustive list of variations. Always check the product disclosure statement (PDS) of your policy for exact eligibility requirements. Source: Australian Securities and Investment Commission


How do I make a TPD claim? Key steps

The appropriate steps will depend on whether you bought your cover inside a superfund or outside of it.

How do I make a TPD claim inside of my super fund?

Some superannuation funds offer a default level of TPD cover for members. You can check if there is TPD cover in your super fund by contacting your fund representative and requesting a copy of your online statements.

4 conditions you need to meet for a super claim

In order to receive a TPD benefit from your super fund, you must meet the following criteria:

  1. You need to satisfy the definition of disablement of the fund insurance contract.
  2. You need to satisfy the permanent incapacity definition as stated under super law.
  3. You need to satisfy the “disability super benefit” definition as stipulated under Australian tax law. This will allow you to claim an additional tax-free portion on the lump-sum benefit.
  4. The fund trustee must be satisfied that you have met the conditions of the policy and are unable to engage in employment that you are qualified to do through education, training or experience.

Steps to follow

  1. Contact your super fund. You will need to contact your super fund and provide the necessary claim documentation. You might also need to provide the following additional documentation:
    • Identification, such as a birth certificate, driver's licence or passport
    • Existing medical reports
    • Medical evidence to support claim
  2. Submit your claim. You need to sign your claim statement and attach all necessary documentation, which you will then give to your case manager. Your case manager will provide assistance throughout the claim process and help ensure that all of the necessary documentation is received.
  3. Your case manager organises the claim. Your case manager will assess your claim to determine whether you are eligible to receive a TPD benefit. The case manager will usually contact your employer to receive a written statement as to why you ceased work.
  4. Your insurer assesses your claim. Your insurance provider will then assess the documentation that you submitted. In some cases, the insurer may request further evidence, such as the following:
    • Doctor reports
    • Further medical examination from an independent specialist
    • Further information from your employer
    • Further information from you
  5. Your insurer accepts or rejects your claim. After assessing all the information provided, the insurance provider will make the following determination:
    • Accepted. Your insurer accepts your claim and contacts you with claim payment options.
    • Declined. Your insurer denies your claim because you have not satisfied the conditions of the policy.
    • Deferred. Your insurer defers your claim in order to do a further assessment on the full extent of your disability and its permanency.

If your insurer defers or declines your claim, it will be referred to the fund trustee who will review the decision made by the insurance provider on your behalf.


How do I make a claim outside of my super fund?

Claiming standalone TPD insurance is similar to claiming TPD held inside of your superannuation, although there are some differences between the two processes. Each claim process may differ depending on the type of claim and the insurance provider, although you will generally need to take the following steps:

Steps to making a TPD claim

  1. Contact your insurer's claims team. You can get the necessary forms from the claims team. Your financial adviser may assist you in filling out the documents if necessary.
  2. Prepare necessary documentation. You will need to provide the following documentation:
    1. Completed claim forms
    2. A statement completed by a certified medical practitioner verifying your illness/injury
    3. Bank details so your insurer can deposit any benefits into your account
    4. Details of previous health claims
  3. Submit claims documentation. You need to complete the claim documentation and submit it to the insurance provider.

How do TPD claims work for multiple super funds?

Many people have TPD insurance that has accumulated in multiple funds that have been opened by different employers. In some circumstances, you may be able to claim multiple benefits at the same time. However, it is important that you carefully check the conditions of each fund before submitting multiple claims at the same time.

Is there a time limit on super fund claims?

There is no time limit on when you can make a claim for a TPD benefit payment held within a super fund. That said, there are time limits on when you can appeal a refusal of a TPD claim. Legislation states that the Superannuation Complaints Tribunal can only review a complaint that has been made within two years after the trustees have made a decision regarding a claim.


Mental illness, claim denials and complex terms

How do I make a claim for depression and other mental illnesses?

It can be difficult to prove that you are unable to return to work on account of mental illness. The episodic nature of mental illnesses can make it difficult for a diagnosis to be formed.

Considerations for a TPD claim related to depression and mental health

  • Your insurer will look at the type of treatment prescribed by a health professional and the regularity of your treatment. This consideration is of particular importance for claims that are late in submission.
  • Your insurer may defer the benefit payment for a mental health claim if the insurer believes that the permanency and severity of your condition is not determined. This deferral can last until all treatment options have been tried.
  • Your insurer will assess if you are able to perform your duties at another place of employment or if you could continue work by adjusting your duties.

What if my claim gets denied?

In the event that your insurer denies your claim, you can ask for a review by following these steps:

Appealing your claim

  1. Submit a complaint to the insurance provider. You should contact the chief underwriter of your insurance company's claim department to discuss your claim. It is important that you give the underwriter a full explanation, supported by evidence, to justify your request for a further review. You need to request that the chief underwriter address each of your concerns. You may need to get further medical documentation from your doctor to support your claim for a review.
  2. Submit a complaint to your insurance provider's internal dispute resolution service. If you are not satisfied with the response you received from the underwriting division, you can write to the complaints and disputes resolution manager of the company. Each insurance provider is required to have this department under the standards set by the Australian Securities and Investments Commission.
  3. Submit a complaint to the Financial Ombudsman Service. If you're still not satisfied with the response from your provider, you can write to the Financial Ombudsman Service. You will need to complete the previous steps before contacting the Financial Ombudsman Service.

Why do life insurance claims (including TPD) get disputed?

Type of claim disputePercentage of total claim disputes
Evidence25%
Delay22%
Underpaid16%
Definitions12%
Eligibility7%
Non-disclosure5%
General denial5%
Limitation period2%
Overpaid1%
Reason not provided for denial1%
Waiting period1%
Approved claim with late or no payment1%
Income protection ceased1%
Sickness vs injury0%
Customer service0%
Miscellaneous1%

Duty of Disclosure

When looking for TPD cover, you have to disclose any relevant information requested by the insurance provider to allow them to assess your situation. This is known as a duty of disclosure. Duty of disclosure is legally binding and you must disclose any relevant, known information to avoid the legal consequences of not informing the underwriter about information that may affect the policy. If you fail to provide this information and your policy is less than three years old, the insurer can terminate the contract. If the insurer finds that you haven't disclosed the relevant information, they may reduce the sum insured in accordance to the premium that would have been payable had the correct information been disclosed at the time of application.

Claims for partial disability

Some insurance providers will provide a partial disability benefit. This means you will have cover for any income lost if you can only work at a reduced capacity because of sickness or injury. An approved medical practitioner must certify your partial disability.

Benefits may be paid out under the following options:

  • Hours based. You will receive benefits if you cannot work the same number of hours as you could before the disability. To qualify, you will need to earn less than you did before your disability and be under medical care.
  • Duties based. You will receive benefits if you are unable to perform all the duties essential to your previous job and are making less income as a result.

This benefit is determined using the following formula:

(Pre-disability income - post-disability income) / (pre-disability income x monthly benefit) Some policies will provide partial payment if you suffer certain disabilities. This may include the permanent loss of the use of the following:

  • Loss of one arm
  • Loss of one leg
  • Loss of sight in one eye

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REPORT 498: Life insurance claims: An industry review

William Eve

Will is a personal finance writer for finder.com.au specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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10 Responses to Total and Permanent Disability (TPD) Insurance Claims

  1. Default Gravatar
    lana | December 29, 2016

    My Tpd claim thru my super has been approved my insurer can I draw on the insurance part of the claim only without having to take out all my super as the insurance part is non preserved

    • Staff
      Richard | January 4, 2017

      Hi Iana,

      Thanks for getting in touch. finder.com.au is a comparison service and we are not permitted to provide our users with personalised financial advice. As claims processes vary between insurers, you should contact your fund for the specifics.

      All the best,
      Richard

  2. Default Gravatar
    Sean | October 19, 2016

    John,

    Insurers will do everything they can to delay and delay. In truth they will make one move every one to two months as they will do their best to hold your money as long as possible. The ombudsmen is no help for a claim that is in progress regardless of the length of time taken. The insurer will claim that they are going through the review process blah blah etc and that there have been unexpected delays blah blah and nothing will be done. The ombudsmen is of use if the claim is an approved one and payments are routinely late etc.

    The only option is to get a lawyer and then escalate to litigation as soon as practicable. in reality, the lawyer will most likely refer you for any necessary medico-legal reviews to help prove the case so it will still take some months.

    Most of the big firms (Slater Gordon for eg) work on a no win no fee and fees are deducted from the final settlement. There is also a good chance that the insurer will agree to cover a large portion of these including medico-legal costs and a percentage of lost interest -this is what happened in my case.

    Trust me. It’s the only way.

    • Default Gravatar
      v | November 10, 2016

      This a question for Sean who posted the first comment.

      What have you learnt from engaging lawyers to handle the claim for you?

  3. Default Gravatar
    John | September 28, 2016

    Are there any regulations on how long a claim should take? I have supplied all documents but have been told the claim can take up to 18 months to decide?

    Thanks.

    • Staff
      Maurice | September 29, 2016

      Hi John,

      If you’ve provided all necessary documentation and you feel as though your insurer is not processing your claim in promptly manner, then it’s a good idea to:
      1) Go through your insurers dispute resolution service to escalate the matter
      2) Get in touch with the financial ombudsman service if you can’t resolve it internally

      You may find this link useful: http://www.fos.org.au/resolving-disputes/before-you-lodge-a-dispute

      I hope this helps,

      Maurice

  4. Default Gravatar
    Christopher | September 19, 2016

    I had a hip and knee replacement with complications, I have
    submitted a claim through my superfund. Now the insurance company contacted my surgeon for more medical information
    The surgeon said he has not got time to do another detailed report
    Where do I go now,does the surgeon have to do
    another medical report when asked by the insurance company.

    • Staff
      Maurice | September 20, 2016

      Hi Christopher,

      Thanks for your question.

      Insurers will typically ask for additional medical information when assessing claims. If you’re unable to get a report from you surgeon, you may wish to seek out an additional/second medical professional who is able to provide a medical report for your insurer.

      If you have provided all necessary information and are still are unable to get to a resolution through your insurer, it’s best to get in touch with the financial ombudsman.

      Best of luck,

      Maurice

  5. Default Gravatar
    | August 23, 2016

    I am currently on SCI through my super and my employer has terminated my employment on the basis of unsustainability. I have been on sick leave since 02/01/2016 and I am still unwell. I contacted my insurance company who have advised me I will still continue to get SCI payments for the duration of the 2 year maximum or until I’m well. My insurance was through my staff super with automatic cover. Prior to being ill I was on SCI payments for an unrelated illness and had been so for the previous 2 years which ended 28/01/2016 so that meant I went from one claim for a condition straight into another new claim for the second condition. Due to the 2 years expiring I was no longer able to claim for that condition, however I am still left with an illness that is unrelated to the current illness. Prior to new illness I was on restricted duties and hours and was only working 12 hours a week with medical certificates and was struggling even to work those limited hours because I was on restricted hours my insurance would only cover me for the hours I had worked prior to new illness, therefore I was only entitled to 12 hours for my new illness. I have no prospects of getting work in my usual occupation that I am trained for and having a condition that is not likely to improve I don’t believe I am employable. My question is due to the fact I’m currently receiving SCI payments and will continue to do so up until 2018 if my condition continues will I be able to claim TPD insurance on both or one of conditions that have left me unable to return to my usual occupation that I am qualified by education or training. How long do I have to make a claim for TPD and can I claim while on SCI payments for another illness. What will happen to my SCI I’m currently on if I do apply for TPD on other condition. Very confusing I hope you understood all that . Thank you

    • Staff
      Richard | August 24, 2016

      Hi Alija,

      I’m sorry to hear about your situation. finder.com.au is a comparison service and we are not permitted to provide our users with personalised financial advice. You should contact your super fund to see if you have a TPD component of cover and if you are eligible for a TPD payment.

      Best of luck,
      Richard

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