If you have been injured or suffer an illness and can no longer work, you may be entitled to a Total and Permanent Disability claim (“TPD claim”).
TPD claims can often be a long, complex process, and if you are considering making a TPD claim, here is some general information and facts to keep in mind.
What is a TPD claim and what does it cover?
A TPD claim is an insurance claim made through your life insurance policy. This can be a stand-alone insurance policy, or through your superannuation.
What is not always known is that most superfunds, by default, are required to provide a level of TPD insurance cover for their customers to claim against.
Generally speaking, a TPD claim is defined as insurance that pays out a lump sum in compensation to you if you become permanently disabled and unable to work. Most insurers have their own specific definitions of what they determine to be a TPD claim. Each policy is different.
Depending on your level of cover, you could potentially make a claim under the following definitions:
- If you are unable to work in your own occupation
- If you are unable to work in any other form of occupation to which you are suited by education, training or experience;
- Living expenses/non-working – this is separate from any claim of loss of income/occupation and focuses on your ability to undertake any usual day to day duties, such as cleaning, personal hygiene etc. This is not always covered by standard insurance policies and is usually an additional inclusion that you will need to seek before accepting that particular policy.
You will need to read carefully through any life insurance policy to see what is and isn't included in your policy.
What is the difference between ‘unable to work in your own occupation' or ‘any job'?
A standard policy will usually insure one or the other, not both.
“Own occupation” coverage means that you could claim TPD insurance if the injury prevents you from working/carrying out the duties of your own occupation which carries a specific skill set.
For example, a carpenter that has only ever worked in and trained in that industry, and is unable to work within that industry anymore may make a TPD claim.
If you are covered for ‘any job', this means that you need to show not only that you are unable to work within your industry, but you are also unable to work in any other form of employment or industry. Depending on the level and nature of your injuries, will depend on whether you meet this definition.
If your injury prevents you from working within your industry, but does not preclude you from working in another industry, you may not have a successful TPD claim without the “any job” cover given that you may still be able to work in other types of employment.
Can you have more than one TPD policy?
It is not uncommon for people to have multiple superannuation funds and have access to multiple TPD policies.
Can you make a TPD claim if you also have a worker's compensation claim or any other personal injury claim (i.e motor vehicle accident, medical negligence etc)
Yes, you are still eligible and able to make a TPD claim if you have another personal injury or worker's compensation claim.
In relation to worker's compensation claims however, it is important to remember that depending on your injuries, level of impairment and benefits under the worker's compensation legislation, any income protection you receive under your superannuation insurer may be impacted by your worker's compensation claim.
We would therefore recommend contacting your superfund at the start of any compensation claim to discuss how this may be affected under their own policies.
Is TPD the same as income protection?
A TPD claim pays you a lump sum payment in line with the limits of your policy. In contrast, income protection pays you a regular income benefit (either weekly, fortnightly or monthly) at a certain percentage. Some do pay a lump sum benefit, but not often.
Your income protection is also only able to be accessed for a set period of time depending on the level of cover, such as only two years or up to a nominated age. Again, this depends on your level of cover and policy and it is important to review these aspects when considering your PDS policy.
Is TPD the same as Trauma payments?
As above, trauma insurance payments are payments for when you experience a traumatic, critical illness or accident. This is paid to you in a lump sum, and does not relate to or takes into consideration whether you are left permanently disabled or not.
This also can be an additional cover and isn't included in the insurer's standard policy.
What are some tips and traps to keep in mind?
As noted above, TPD claims can be long, drawn out and complex processes.
If you intend to make a claim under your TPD policy, it is important that you:
- Carefully read through your PDS policy to see what you are and aren't covered for.
- Take care to complete the claim form as accurately as possible, and include all relevant information requested.
- Collate and ensure that you have provided to the insurer all relevant medical evidence and keep your treating medical professionals informed as it is likely both you and the insurer will require reports or opinions from your treating doctors about your injuries.
- Keep records of all communication that you have with the insurer, including file notes on all telephone calls, emails and letters and keep them in as much order as possible.
- Be patient. Unfortunately, these claims can take time and insurers will first want to obtain all relevant medical evidence to determine that you meet the criteria for a TPD claim.
- Try to work with the insurer in a collaborative way as much as possible as it can make the process much easier to work through.
- If you are confused or in doubt about how the insurer is handling your claim, seek legal advice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.