Follow our guide to making a successful total and permanent disability claim in Australia.
If you're making a claim on your total permanent disability (TPD) insurance then it's crucial you understand the conditions around claiming TPD in Australia. The process from submitting a claim to actually receiving a benefit payment can be a lengthy one if you don't follow the necessary steps.
So your claim for total permanent disability has come back rejected… well, don't give up just yet.
Most insurers subscribe to one of two codes of practice: either the General Insurance Code of Practice (GICP) or the Superannuation Voluntary Code of Practice (SVCP). Each of these codes offers a very similar process for disputing decisions you disagree with.
This will require you to present a strong case backing up your claim, first to the insurer themselves and then to the appropriate regulatory authorities. Click below to read a short guide on the appropriate steps to follow.
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.
The criteria that insurers use to determine eligibility for payment include the following:
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
5. How long have you been working?
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.
The following chart highlights the various criteria that different insurers may have before accepting your claim.
|Criteria||Common variations between insurers*|
|The extent of your disability||
|Own vs any occupation||
|Minimum work history||
|Loss of independence||
|Ongoing medical care||
*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
The appropriate steps will depend on whether you bought your cover inside a superfund or outside of it.
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.
Steps to follow
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
- 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.
- 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.
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
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.
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
- 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.
Prepare necessary documentation. You will need to provide the following documentation:
- Completed claim forms
- A statement completed by a certified medical practitioner verifying your illness/injury
- Bank details so your insurer can deposit any benefits into your account
- Details of previous health claims
- Submit claims documentation. You need to complete the claim documentation and submit it to the insurance provider.
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.
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.Back to top
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.
- 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.
In the event that your insurer denies your claim, you can ask for a review by following these steps:
Start with the insurer
- Understand why you were denied. Is the insurer claiming your cover was expired? Are they claiming your disability was caused by a pre-existing condition that was excluded from your policy? Understanding why insurer reached their conclusion will help you put together a more effective counter-argument.
- Put together your case. Re-read your policy in detail to make sure you're not misunderstanding any key points. Then type a letter stating why you think the decision was wrong and gather any additional supporting evidence you may have missed when you originally submitted the claim. For example, maybe you were able to dig up medical evidence proving your disability was not caused by an excluded pre-existing condition.
- File a dispute with the insurer. All financial providers who have signed their relevant code of practice are required to have an internal dispute resolution process (IDR). Send your case in writing to your insurer's resolution department and they will review your case independently from the claims department that originally reviewed your case.
- Wait. Insurers have 45 days from start to finish (90 days for funds within super) 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
You still have options at this point:
- Take it to the regulatory authorities. If your claim comes back denied again, or the insurer hasn't made a decision within 45 days (90 for super), you can take the complaint to the appropriate regulatory authority. For normal insurers, that's the Financial Ombudsman Service (FOS). For insurance within super, that's the Superannuation Complaints Tribunal (SCT).
- Take legal action. If the relevant regulatory authority doesn't rule in your favour, there is nothing stopping you from hiring a lawyer and taking your case through the external justice system.
Why do life insurance claims (including TPD) get disputed?
|Type of claim dispute||Percentage of total claim disputes
|Reason not provided for denial||1%|
|Approved claim with late or no payment||1%|
|Income protection ceased||1%|
|Sickness vs injury||0%|
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.
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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