What’s the difference? Income protection insurance and TPD insurance

Many Australians have insurance products that allow them to claims benefits if they are sick or injured and unable to work as a result – they just don’t know it! Many people have total and permanent disability (TPD) insurance through their superannuation funds, while some also have income protection insurance as well.

Your hard-earned dollars are paying for this insurance, so it’s important that if you are ill or injured, you understand what all of your options are. This blog provides practical information on what you need to know.

What is income protection insurance?

Income protection insurance (or salary continuance benefits, as they are sometimes known) is an insurance product that allows an insured person who is sick or injured to make a claim for benefits that are paid each month that they are unable to work. Some people have income protection insurance through their super, or purchase it themselves directly from an insurer.

Benefits are usually calculated on your earnings before you ceased work at a rate of around 75 to 85 percent of your ‘pre-disability’ income.

In order to make a successful income protection claim, you’ll usually need to show the following:

· that you have ceased work due to injury or illness;

· that you are unable to work for the insurer’s waiting period, and on an ongoing basis (waiting periods are typically 30, 60 or 90 days); and

· that your doctor has confirmed that you are unable to work. They will usually need to complete an income protection form on a monthly basis.

Every insurer and every income protection policy is different. Benefits are paid until the person can return to work, or until the end of the benefit period which can be two years, five years or until age 60, 65 or 70.

 

What is TPD insurance?

TPD insurance is an insurance product that allows an insured person who is sick or injured to make a claim for a TPD lump sum. To make a successful TPD claim, you’ll generally need to show the following:

· that you have ceased work due to sickness or injury;

· that you did not work for the insurer’s waiting period. This is usually three to six months; and

· that after this time are unable to return to work in an area within their education, training or experience


This can include a chronic illness or impairment, or mental illness or impairment. If you have been injured, it is not necessary that it occurred in the workplace.

Every insurer and every TPD policy, including the definition it uses of TPD, is different. Remember, insurers will often take a limited interpretation.

At Littles, we are TPD and income protection experts.

If you want to know your rights, call us for a free super claim check today. 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.

Can I have both income protection and TPD?

Yes. If you have both TPD and income protection insurance, you can usually claim on both without impacting the other. We’ve had clients who assume that they cannot make a TPD claim while they are in receipt of income protection benefits. Most of the time, this is not the case.

Depending on your insurer and your policy, there may be some exceptions. If you have an entitlement to both TPD and income protection benefits, it is possible that claiming a TPD benefit may end your entitlement to income protection or similar benefits.

If you’re unsure about whether you should make an insurance claim, let Littles help. We can do a free super claims check so you know what your options are. Get in touch here!

I have already left my job. Can I still make a claim?

Depending on your insurer and your insurance policy, you can usually still make a claim if you have already terminated your employment. However, some insurers that require you to continue to be employed to make a claim, or to make a claim within a certain amount of time after you cease work.

Seeking high quality legal advice before you leave your job may provide you with more options when it comes to making a claim. However, we know that for some people, the suffering caused by their injury or illness is so severe that they terminate their employment without considering what insurance might be available.

Whatever your situation, Littles can still help. The key message is: if you can no longer work because of injury or illness, get in touch with Littles. We are TPD experts and can help you understand if you’re entitled to make a claim, and important next steps.

Don’t delay – seek advice now

If you have an illness or injury that prevents you from working, you might be worrying about how you are going to pay your bills and put food on the table. You could be entitled to receive a TPD lump sum, as well as other insurance benefits. Get in touch with Littles for a free super claims check. We can help you understand what you’re entitled to. Know where you stand, and get peace of mind.

Free advice and no upfront fees

Not only do we offer a FREE claims check – we handle most insurance claims on a no win, no fee basis.

Our Head of TPD and General Insurance, Rowan McDonald, is an insurance law expert. If you think you might have a claim, get in touch with Rowan and his team for high quality legal advice.

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