TPD and Income Protection

TPD insurance, or Total and Permanent Disability Insurance, is designed to pay the Insured a lump sum payment if the Insured is unable to perform his/her occupation due to an illness or injury.  

The types of illnesses and injuries which trigger a TP policy are defined in the TPD policy.  They may include:

• Anxiety
• Back injury
• Cancer
• Cardiomyopathy
• Dementia
• Depression
• Paraplegia
• Post-Traumatic Stress Disorder
• Motor Neurone Disease
• Multiple Sclerosis
• Muscular Dystrophy

An individual claimant or a group of individuals may insure themselves for TPD through a disability insurance policy, or as part of a life insurance policy or a superannuation fund.

The definition of “total and permanent disability” depends on the actual policy wording purchased by the Insured.  Therefore, please carefully consider the definition before purchasing the policy.

However, the term “total and permanent disability” usually means that because of an illness or injury, the Insured is unable to work in their own occupation, or any occupation, for which the Insured is suited by experience, training or education.

There is a distinct difference between “own occupation” and “any occupation” when it comes to the definition of “total and permanent disability” in policy wordings.  The latter term is broader than the former term.  In other words, it is usually easier for an Insured to prove he/she can no longer work in his/her “own occupation”, as a result of sickness or injury, rather than in “any occupation”.

Also, although TPD insurance refers to “total and permanent disability”, some insurers may provide cover for partial disability.  As a result, an Insured may receive a payout for income lost if the Insured can only work at a reduced capacity because of illness or injury.

The length of time processing a TPD claim depends on a variety of factors including the type of illness/injury suffered by the Insured and the terms of the Insured’s TPD policy.

For instance, it may take the Insurer longer to assess a claim where the Insured has sustained a relatively minor injury and the Insured’s policy contains an “any occupation” definition, when compared to a claim where the Insured has sustained a very serious injury and the Insured’s policy contains an “own occupation” definition.

However, generally it takes between 6 and12 months for a TPD claim to be finalised.

Once the Insurer makes its decision about the Insured’s TPD claim, the trustee of the superannuation fund must make their own separate assessment of the claim. This process usually takes a further 1 to 2 months.

Every TPD policy is different in terms of waiting periods.

An Insured is eligible to make a claim after the waiting period passes, with that waiting period usually being a period of three or more consecutive months when the Insured has not been able to work due to injury or illness, with no prospect of returning to work.

The TPD claims process commences with the Insured confirming what TPD policies are available and then lodging claims with the appropriate forms to the relevant Insurer or superannuation fund.

Once the Insurer opens a claim file, the Insurer will seek an array of information and documentation from the Insured relating to the claimed illness/injury and the Insured’s employment.  The Insurer may even request that the Insured undergo a medical examination.

Once the Insurer completes its assessment, it will notify the Insured of its decision.

An Insured successfully completes a TPD claim by lodging a claim on time and complying with the Insurer’s requests for information and documentation.  Additionally, an Insured may be required to attend an independent medical examination organised by the Insurer.

An Insured does not “need” a lawyer to submit a TPD claim and the claims process is not an adversarial process.

However, a lawyer may be able to undertake searches to ascertain that all available policies and funds have been identified such that an Insured may claim on multiple TPD policies.  Lawyers may also assist an Insured to navigate the claims process.

At Denning Insurance Law, we offer our services to Insureds who are making TPD claims because they may have difficulty understanding the process or completing claim forms, or they have encountered specific difficulties or issues such as:

• Pre-existing illnesses or injuries 
• Inadequate or incomplete evidence
• Policy exclusions

If the Insured’s illness or sickness correlates with the wording of the TPD policy, then a TPD payout is likely.

However, receiving a TPD payout may become hard if any of the following situations arise:

• The Insured made incomplete or false disclosure to the Insurer before the TPD policy commenced
• The Insured no longer has a valid TPD policy or stopped paying premiums to the Insurer
• The Insured lodges their claim too late
• The Insured lodges their claim before the waiting period passes
• The Insured does not meet the definition of “total and permanent disability” 
• The Insured submits a fraudulent claim
• The Insured does not provide the Insurer with correct and reliable evidence as to matters such as the illness, the injury or the Insured’s employment history

The answer to this question depends upon your policy wording.

The Insured’s occupation type and the cover afforded by the TPD policy may determine the level of impairment the Insured must demonstrate to qualify for a TPD payment and substantiate whether the Insured may undertake “any occupation” after the TPD claim has been finalised.

The lump sum payment made by an Insurer to an Insured for a TPD claim depends upon the cover purchased by the Insured or available to the Insured through the Insured’s superannuation fund.

Anecdotally speaking, TPD payouts may range from $50,000 to $300,000.

The fees law firms can charge to assist clients in these cases can vary considerably.  At the start of each new matter, we provide clients with a costs agreement explaining how our fees are calculated and the range of possible fees that may be charged in their case. We do not charge clients a percentage of their payout amount but on the basis of our time taken to do the work, so they only pay for the services they need.