TPD Claims – Steps to a Successful Claim for Total and Permanent Disablement Cover

Information verified correct on February 27th, 2015

Making a Claim for TPD in Australia - What All Applicants and Policyholders Should Know

It is crucial that all TPD Insurance policyholders and anyone looking to take out TPD cover to have a clear understanding on the conditions around claiming TPD in Australia. The process of submitting a claim to actually receiving a benefit can take months and be complicated. An understanding of this process can ensure that the right steps are made by the policyholder and a successful claim can be achieved.

This article will outline the claims process for TPD insurance that is held within a superannuation fund and for cover that is held outside a superannuation fund. In doing so it will offer key advice to policyholders on how to best prepare for the event of a claim to ensure the process runs smoothly and that there is no delay in payment.

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When Can a Total and Permanent Disability Insurance Claim Be Made?

A TPD claim benefit can be received when the policyholder has satisfied the definitions of TPD as defined by the insurance company or Super Fund in which their cover is held. It is extremely important for policyholders to be clear on what definition their policy falls under to avoid any surprises in the event of disablement. Generally Total and Permanent Disablement will be considered under either “Own Occupation” or “Any Occupation”

  • Own Occupation: The policyholder has become disabled and is unlikely to ever return to full time work in the position of which they are employed for.
  • Any Occupation: The policyholder has become disabled and is unlikely to ever be able to engage in any form of regular paid work again for which they may be suited to by education, experience or training.

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Criteria for a Successful TPD Claim

Most providers will also require the claimant to be unable to perform the duties of their occupation for at least three months before turning the age of 65.

Conditions of the TPD cover are also often subject to the occupation category of the policyholder.

 

Partial Disablement Feature

Some insurance providers will provide the option for Partial Disablement whereby as a result of sickness or injury the policyholder is not totally disabled and is able to work in their own occupation at a reduced capacity. As a result, the insureds monthly income is less than the pre-disability income. This must be certified by an approved medical practitioner.

The requirements of partial disablement feature generally comes under an hours or duties based definition.

  • Hours Based Partial Disablement: Benefit paid if policyholder has returned to work following being partially disabled for entire duration of waiting period and is able to perform duties in their occupation for defined number of hours, is earning less than their pre-disability income and is under medical care.
  • Duties Based Definition: Benefit paid after policyholder has returned to work following being totally disabled and is not capable of performing the duties essential in producing their income and is forced to earn less than their pre-disability income.

This benefit is determined using the following formula:

(Pre-disability income - post-disability income) / (pre-disability income x monthly benefit)

Some policies will provide this partial payment under certain defined conditions suffered by the policyholder. This may include the permanent loss of the use of;

  • One arm, or
  • One leg, or
  • Sight in one eye

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Mental Illness, Depression and TPD Claims

One of the most common claims for disability insurance in Australia in recent years is for Mental Illness. As such, life insurance companies are becoming increasingly stringent around the requirements for a successful benefit payment. In 2006 alone there was $206 million paid out in TPD claims in Australia, 20% of which were related to mental illness (insuranceandrisk.com.au). In order to receive the TPD benefit payment for reasons related to mental illness, the condition must be severe enough for the policyholder to be required to take time off of work.

If an applicant has experienced a mental illness in the past, this will be taken into consideration by the insurance underwriter. It can be extremely difficult for underwriters to assess the risks of mental illness as there is such a great range of forms with different degrees of severity. Underwriters will in most cases require a medical attendant report in order to assess the applicants condition and the level of risk they carry.

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Difficulty of Assessment of TPD Claims for Depression and Other Mental Illnesses

Policyholders should be aware that it can be difficult to prove that they will be unable to return to work again on account of mental illness. The episodic nature of mental illnesses can make it difficult for diagnosis to be formed.

Considerations for TPD Claims Related to Depression and Mental Health

  • The type of treatment prescribed by practitioner and the regularity of that treatment. This consideration is of particular importance for claims that are late in submission.
  • Benefit payment for a mental health claim may be deferred if it is believed that the permanency and severity of the insureds conditions is unable to determined. This can be prolonged until all treatment options are trialled.
  • Definition of total and permanent disablement in policy. For claims based on disability preventing individual from their own or any occupation as a result of work related stress, an underwriter will assess if they would still be unable to perform their duties at another place of employment or if their duties at their current work were adjusted.

Learn more about life insurance for mental illness

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Superannuation TPD Claims

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

 

Payment of Total and Permanent Disability Claims in Superannuation

In order to receive a TPD benefit from their super fund a member must;

  1. Satisfy all conditions of the fund insurance contract.
  2. Satisfy the permanent incapacity definition as stated under super law.
  3. Satisfy “disability super benefit” definition stipulated under Australian tax law. This will allow the policyholder to claim an additional tax-free portion on the lump sum benefit.
  4. Fund trustee must be satisfied that the insured has met the conditions of the policy and is unable to engage in employment that they have are qualified in by education, training or experience.

 

TPD Claims Process: Inside Superannuation

    1. Contact Super Fund: Policyholder to contact their super fund after which they will be provided with necessary claim documentation. They will also need to provide additional documentation. This might include;
      1. Identification - Birth Certificate, Drivers Licence, Passport
      2. Existing medical reports
      3. Medical evidence to support claim
    2. Submit Claim: Claimant to sign their claim statement and attach to all necessary documentation. This will then be provided to their Case Manager. A Case Manager provides assistance throughout the claim process, ensuring all of the necessary documentation is received.
    3. Organisation of Claim by Case Manager: Case Manager will assess policyholders claim to determine whether they are eligible to receive a TPD benefit. They will usually contact the claimant's employer to receive a written statement as to why they ceased work.
    4. Claim is Assessed By Insurer: An insurance provider will assess the documentation submitted. In some cases further evidence may be require including;
      1. Doctors reports
      2. Further medical examination with an independent specialist
      3. Further information from the claimant's employer
      4. Further information from the claimant
    5. Claim is Assessed by Insurer: The insurance provider will assess the claim and determine if it is;
      1. Accepted: Claimant contacted with claim payment options.
      2. Declined: Claim is deferred while the provider assesses full extent of disability and its permanency. Claim is denied as the insurer has deemed the claimant has not satisfied the conditions of the policy.
      3. Deferred: Claim is deferred while the provider assesses full extent of disability and its permanency.

If the claim is deferred or declined it will be referred to the fund trustee who will review the decision made by the insurance provider on the claimant's behalf.

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Payment of TPD Claims in Multiple Super Funds

It is not uncommon for people to have TPD insurance that has accumulated in multiple funds that have been opened by different employers. It is possible in some circumstances for the policyholder to claim multiple benefits at the same time. However it is important that the claimant carefully checks the conditions of each fund before submitting multiple claims at the same time.

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TPD Claim Time Limit

There is no time limit on when an TPD claim can be made for a benefit payment for TPD held within Superannuation. That said, there are time limits placed on when an appeal can be submitted for the 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 making of the trustees decision of which the complaint is related to.

Read more on tpd insurance inside superannuation

 

TPD Claims Process Outside of Super

Claiming standalone TPD Insurance is quite similar to claiming TPD held inside of Super though there are some differences between the two processes. Each claim process may differ depending on the type of claim and the insurance provider though in most cases it follow the following steps.

Steps to make a TPD claim:

      1. Contact the insurers claims team: The claims team will provide the policyholder with the necessary claims form. Your financial adviser may assist you fill out the documents if necessary.
      2. Prepare Necessary Documentation: This will usually include;
        1. Completed claim forms
        2. Medical attendants statement completed by certified medical practitioner giving verification of the illness/injury.
        3. Bank details may be required to allow provider to deposit any benefits into nominated account.
        4. Details of previous health claims may be required.
      3. Submit Claims Documentation: Completed claim documentation to be submitted to insurance provider.

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Total and Permanent Disability Claims and Duty of Disclosure

It is crucial for anyone looking to take out protection cover that they fully understand their obligations under a “duty of disclosure”. In the event that a claim is made, this is the first document that will be checked against the claim application form.

Before applicants enter into an insurance contract for TPD cover, they are required to disclose any relevant information that may be required by the insurance provider to allow them to assess your situation. This is known as the duty of disclosure.

This duty of disclosure is legally binding and applicants must disclose any relevant known information to avoid legal consequences for not informing the underwriter of information that may affect the policy.

In the event that the applicant has failed to comply all information in their duty of disclosure and the policy is less than three years old, the insurer is within their rights to check the duty of disclosure and terminate the contract. In the event that the insurer finds that the duty of disclosure is fraudulent, they may also 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.

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Appealing a TPD Insurance Claim

In the event that the claim is denied by the Insurance provider, there are certain steps that can be taken to have the decision reviewed.

1. Submit a Complaint to the Insurance Provider

Policyholders should contact the chief underwriter of the insurance companies claim department. It is important to Take the time to set out the complaint to the underwriter in full with evidence to justify request for further review. Policyholders should request that the chief underwriter addresses each issue.

The policyholder may be required to receive further medical documentation from their doctor. A more comprehensive report may be needed if the claim is to undergo further review.

2. Submission of Complaint to the Insurance Providers Internal Dispute Resolution Service

If the policyholder is not satisfied with the response received by the underwriting division they are able to write to the Complaints and Disputes Resolution Manager of the Company. Each insurance provider is required to have this department under standards set by the Australian Securities and Investments Commission.

3. Submit Complaint to the Financial Ombudsman Service

If the claimant is not pleased with the response from the provider they are able to write to the Financial Ombudsman Service. All claimants will need to undertake the previous steps with the insurance company before contacting the Financial Ombudsman Service.

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Conclusion: Preparation is Key for a Successful Total and Permanent Disability Insurance Claim

As with any form of protective cover, a successful claim for TPD will be the result of the insured clearly understanding the conditions of their policy and what events they are covered for. This goes hand in hand with disclosing all known relevant information at the time of application to the insurer and notifying the provider of new conditions that may not be covered as they surface. Policyholders who take the gamble of not disclosing important details are gambling their chance to receive a payout for events that could bring great financial hardship. In addition, understanding the actual claims process for cover held within and outside of super will ensure that the overall process is executed smoothly and there is no delay in the payment of their claim.

 

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88 Responses to TPD Claims – Steps to a Successful Claim for Total and Permanent Disablement Cover

  1. Default Gravatar
    Greg | February 11, 2015

    Hi Richard,
    I am just beginning to long process of paperwork for TPD claims on behalf of my wife who has developed Myeloma & Cardiac Amyloidosis

    After searching with the ATO super seeker we discovered that she has 3 funds with a TPD component (2 with salary continuance which is currently being assessed)

    a couple of questions

    should all 3 TPD funds pay out the insured value?

    There has been mentions of receiving a reduced salary continuance payment (if approved) due to the fact there are 2 funds we are claiming against, can they do that even though the premiums have been deducted for $X per month
    Noting also that the sum of both salary continuance funds is barely 20% of her usual salary

    Thank you in advance
    Greg

    • Staff
      Richard | February 12, 2015

      Hi Greg,

      Thanks for your question. If your funds premiums were up to date, you may be eligible to make multiple claims. However, your benefit may be impacted by the salary continuance payment but that will depend on each of the providers. Because each fund is different, your best bet would be to contact the appropriate claims department as they will be able to give you advice specific to your situation.

      I hope this was helpful,
      Richard

      I hope this was helpful,
      Richard

  2. Default Gravatar
    katrina | January 25, 2015

    With tdp claims, do you receive the amount you are insured for?

    • Staff
      Richard | January 27, 2015

      Hi Katrina,

      Thanks for your question. As long as you have satisfied the conditions of being classed as Total and Permanent Disabled and the insurer has approved your claim, you should generally receive the full insured amount, minus any fee, charges and taxes.

      I hope this was helpful,
      Richard

  3. Default Gravatar
    SOPHIE | January 18, 2015

    TPD claim was accepted , the insurer paid some money and im fighting to get the other 4 units
    Recent my claim for the extra units was rejected due to Duty of Disclosure
    I was contributing for nearly 10 years why now are they questioning the above
    I want to take it to court it has been 3 years and still going
    help what now
    Sophie

    • Staff
      Richard | January 19, 2015

      Hi Sophie,

      Thanks for you’re question and I’m sorry to hear about your situation. One alternative to court is going through the dispute resolution process. It means that you’ll have to lodge a complaint with the insurer. If after the dispute resolution process you’re still unhappy with the outcome, you can contact the Financial Ombudsman Service.

      I hope this was helpful,
      Richard

  4. Default Gravatar
    toni | January 16, 2015

    Hi, Is there a time limit on claims for TPD outside of super? eg: Comminsure

    • Staff
      Richard | January 16, 2015

      Hi Toni,

      Thanks for your question. In order to claim you will need to have satisfied various conditions, one of which will be time related. It’s best to contact your insurer as they will be able to tell you the specifics of your policy.

      I hope this was helpful,
      Richard

  5. Default Gravatar
    edward | November 13, 2014

    I am the process of claiming and my TPD claim was approved including the amount. how long my payment will take.

    Regards
    Edward

    • Staff
      Richard | November 17, 2014

      Hi Edward,

      Thanks for your question. There isn’t a standard time with which a TPD payment takes to clear as it will depend on your insurer. Just give them a call and they will be able to tell you exactly how long the process normally takes.

      I hope this was helpful,
      Richard

  6. Default Gravatar
    Rom | October 21, 2014

    Thanks for your reply below. My Solicitor said the Australian Super normally takes 4 to 6 weeks to process the cheque. Is my solicitor exaggerating so I won’t hassle them everyday ?

    • Staff
      Richard | October 22, 2014

      Hi Rom,

      I can’t speak to the specifics of you situation as finder.com.au does not have access to that kind of information. However, if you want to find out exactly how long your payment will take, you can contact Australian Super on 1300 300 273.

      All the best,
      Richard

    • Default Gravatar
      Rom | October 22, 2014

      Thanks Richard you’ve been very helpful.

  7. Default Gravatar
    Rom | October 21, 2014

    I have an approved TPD through Australian Super. My Solicitor already submitted the Payment Instructions Form and my I.D. How long would I get the cheque.

    • Staff
      Richard | October 21, 2014

      Hi Rom,

      Thanks for your question. Once you payment has been approved it normally takes between 2-4 business days for the benefit payment to be paid into your account. You may want to contact your solicitor or the insurer directly as they will have that kind of information.

      I hope this was helpful,
      Richard

  8. Default Gravatar
    Jo | October 16, 2014

    My partner made a claim through a lawyer for tpd due to his chronic medical condition that stopped him from doing the job he had been trained in for 15 years. We are at the stage where the paperwork is being assessed by the insurance side. Roughly how much longer would it take for an answer? We where very thorough and sent in all medical reports from over the years. It’s been going since January this year :-( Financially we are struggling.

    • Staff
      Richard | October 17, 2014

      Hi Jo,

      Thanks for your question and I am sorry to hear about your situation. Unfortunately, there is no average when it comes to the time it takes for a TPD claim to be assessed. TPD claims can be very complex, depending on whether the policy was an ‘any occupation’ or ‘own occupation’ policy, but you generally would have heard something by now. If you feel like you have bee treated unfairly by the insurer, it may be worth contacting the Financial Ombudsman Service. Below are some links to help you work through the process:

      FOS dispute handling process
      Before you lodge a dispute
      Lodge a dispute

      I hope this was helpful and good luck,
      Richard

  9. Default Gravatar
    Virginia | October 9, 2014

    I am in the process of claiming total disability through a super fund. It began march 2013. I have submitted everything they request. It seems each time I do they request something else. At the moment I’m having trouble because they say the 3 page list and explanation of a 35 yr work history doesn’t show exact start finish dates. I don’t understand why dates are relevant. Ive now exhausted my account with insurance and fee deductions as I haven’t worked in any capacity for 3 yrs now. Are they just hoping il go away. I never thought it would b so difficult t claim.

    • Staff
      Richard | October 10, 2014

      Hi Virginia,

      Thank you for your question and I am sorry to hear about your situation. You may want to contact the Financial Ombudsman Service. Below is a link to their website and the process you should take before contacting them.

      http://www.fos.org.au/resolving-disputes/before-you-lodge-a-dispute/

      I hope this was helpful,
      Richard

  10. Default Gravatar
    Marina | August 29, 2014

    Hi

    My TPD claim was approved. What happens if later on i feel like i can do some light work – do i have to pay back the money to the insurance company? Do i need to let the insurance company know if i start work? I have not been able to hold down a job and have been unemployed for three years. Thank you

    • Staff
      Richard | September 1, 2014

      Hi Marina,

      Thanks for your question. To the best of my knowledge, generally if you have already received the TPD lump sum payment, there should be nothing restricting you from returning to work, i.e. having to pay back the benefit amount. However, every insurer is different, so it would be of benefit to review your policy document for any caveats.

      I hope this was helpful,
      Richard

    • Default Gravatar
      Marina | September 1, 2014

      Thanks Richard.

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