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‘Total and permanent disability’ (TPD) insurance is an insurance product that pays a lump sum benefit if you become sick or injured (or both) and unable are unable work again. Most people will have TPD benefits available through their superannuation fund – they just don’t know it!
If you cannot work because of injury or illness, being able to receive TPD benefits will be an important part of ensuring your financial wellbeing. This blog provides practical information on what you need to know.
If you’ve had a job, chances are you’ll have at least one super fund. In Australia, most super funds offer default insurance cover for TPD, death and sometimes income protection, just by being a member.
There are thousands of super funds in Australia, with different insurance policies, arrangements and entitlements. Unfortunately, many people are unaware that their super fund even exists, let alone which fund they are in or that they are insured for.
You have likely been paying premiums for TPD and death insurance for years. Knowing and understanding precisely what your fund offers is important.
Super funds are not the only source of TPD insurance. You could also be insured for TPD under other arrangements, including
• your employment contract;
• your workplace (or former workplace) enterprise bargaining agreement;
• insurance that you purchased through a financial advisor or directly from an insurer; or
• CTP insurance.
You may be entitled to claim on more than one policy, depending on your personal circumstances.
If you have been injured or are unwell and cannot work, this might seem like a lot to take in. Wading through insurance policies and looking for old super funds can be stressful and time consuming.
Let Littles help.
We offer a free super claim checker, and can tell you which super funds are in your name and what insurance coverage they provide. Get peace of mind and know where you stand.
To make a successful TPD claim, you need to:
• have TPD insurance;
• demonstrate through medical and other evidence that you’re unable to do your normal job or any other work related to your training and experience;
• complete the complex and time-consuming insurer claim forms, including statements form your previous employers and doctors; and
• navigate the slow and difficult claim assessment process (usually 6 to 18 months!).
Remember, being a good candidate for a total and permanent disability claim doesn’t mean that you’re unfit for all work – just that you’re unable to do the work fitting your area of skill and expertise. Sometimes, you may need to show that you cannot be retrained to do another different job. This will depend on the fund, as different insurers may have different claim thresholds and requirements.
Importantly, the cause of the illness or injury doesn’t usually matter. Your illness or injury doesn’t have to be work-related. A TPD benefit can be payable for any illness or injury that prevents you from working. We have assisted people claiming for many chronic illnesses including:
• Multiple Sclerosis (MS)
• Parkinson’s Disease
• kidney/renal failure, and
• mental health disorders.
If your claim is successful, you will usually be paid a lump sum into your super fund. If your insurance is not held by your super account, benefits will likely be paid directly to your personal account.
The amount that you are entitled to claim will depend on the policy your fund holds. Generally, the benefit amount is worked out based on your age when you cease work. If you have more than one super fund, you might be able to make more than one claim. These benefits are usually paid by lump sum into your super account. This lump sum is often substantial and can be more than $100,000 depending on your super fund and your personal circumstances.
At Littles, we are TPD experts and always check what insurance cover you had when you last worked, not the cover that you have at the time you made an inquiry to Littles. This is because the amount of the insurance benefit available to you changes over time. In some cases, your insurance can stop without you even knowing.
Even if your super fund is telling you that you have no insurance cover, it’s worth getting independent legal advice. You’ve worked hard for your super, and the insurance that comes with it. If you’ve been sick or injured, we can help you understand if you’re entitled to make a claim.
Let Littles help. We can do a free super claims check today.