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Total and Permanent Disability (TPD) insurance provides a lump sum payment to members in the event that they are permanently incapacitated to work within their usual occupation, or any other occupation suited to their education, training, and experience.
TPD is an essential component of many superannuation funds, offering financial protection to workers who are prevented from working due to a disabling condition. The unfortunate reality, however, is that some superannuation funds have been accused of engaging in unfair claims practices, particularly with TPD claims.
Below are some of the most common examples our firm has witnessed of unfair claims practices by superannuation funds:
Undue delays: Superannuation funds and insurers can sometimes use tactics to delay the processing of TPD claims which may in turn cause undue stress and financial hardship to claimants. Such delays may include untimely response to information requests by claimants or their solicitors, numerous requests for medical evidence from claimants’ medical providers, and prolonged investigations. Unfortunately, some claim managers are also very difficult to contact once the claim is ongoing which mostly causes unnecessary delays in the assessment of claims.
Inadequate investigations: It is not unusual for superannuation funds to conduct incomplete or superficial investigations into TPD claims. Though some superannuation funds and their insurers may request repetitious and unnecessary medical evidence, other times they may overlook important pieces of evidence or fail to inform themselves of relevant information. Failing to consider crucial evidence as well as the overall impact of the disability on the claimant’s ability to work can lead to claim denials.
Unjust denials: Unjust or wrongful denials happen when superannuation funds reject valid TPD claims without reasonable justification. Some instances that could lead to this is misinterpretation of policy terms or an having to meet an extremely and unnecessarily high threshold of proving total and permanent disability.
Lack of communication: In some instances, superannuation funds and their insurers fail to maintain effective and timely communication with claimants or their solicitors about the progress of their claim. This lack of transparency can adversely affect claimants and contribute to their stress.
Fortunately, claimants are not without legal protection should they experience any of these practices. The Life Insurance Code of Practice affords claimants protection against unfair claims practices by setting standards and guidelines that insurers must adhere to when handling claims. The Code aims to improve transparency and promotes fair treatment of claimants. Under the Code, insurers have the following obligations:
Prompt and fair assessment of claims: Insurers must handle claims fairly and efficiently, and ensure timely assessment and decision-making on TPD claims.
Fair assessment criteria: Insurers must employ reasonable and appropriate assessment criteria for TPD claims, and not subject claimants to unreasonably high standards of disability. They must ensure that claimants are not denied their rightful benefits due to unconscionable technicalities of policy terms.
Reasonable requests for information: Insurers should only request relevant and necessary information about claimants in the assessment of their claims, and avoid excessive and redundant requests that may cause unnecessary delays.
Clear communication: Insurers are required to provide claimants clear information about the claims process (including all the required documentation) as well as timely updates regarding the assessment of their claims.
Independent review: Insurers must inform claimants that they have a right to request an independent review of their claim should they disagree with the insurer’s decision.
Put simply, the Life Insurance Code of Practice serves as a guidepost, setting up a benchmark for insurers’ conduct and fostering a culture of fairness, transparency, and customer-centricity. It aims to build the trust and confidence of the public in the life insurance industry by ensuring that policyholders get their rightful benefit and the financial support they need during critical moments in their lives.
If you believe you have experienced any of the above unfair claims practices in your Total and Permanent Disability (TPD) claim, you are entitled to legal help. Seeking legal assistance can provide you with the expertise needed to challenge these practices, ensuring fair assessment of your claim throughout. Options for legal recourse include consulting with experienced solicitors specializing in superannuation and TPD claims.
Littles is an expert in superannuation and TPD claims. We can help you navigate the complexities, holding insurers accountable and advocating for your rightful benefits. We will provide you with adequate support, assert your rights, and work towards a fair and reasonable outcome. Reach out to us for a free consultation today.