More than 13 million Aussies trust a TPD cover to protect them and their ability to work!
A Total and Permanent Disability (TPD) cover acts as a financial safety net if and when a serious accident, injury or illness disrupts your life. The cover helps you with the costs of rehabilitation, debt repayments and the future cost of living.
Income protection insurance comes in handy to replace a portion of your income when you are temporarily unable to work due to an illness or injury, but if you are permanently impacted and unable to return to work altogether, in addition to income protection, it can be useful to have a lump sum of money to cover your immediate and future costs. TPD can be used for this purpose.
It can be a way forward in a very dark time, allowing you to support yourself as well as your family.
A thing to remember is that - the definition of “total and permanent disability” can have subtle differences between insurance policies and you need to read the fine print. It can mean that you are disabled to the extent that you will probably be unable to work again in your field or, generally, in any other job role.
Here in this week’s blog post, we shed light on the details and what you must consider when selecting a TPD policy.
Considerations When Picking TPD Insurance
You can buy TPD cover through your super fund or directly from an insurance company or a financial adviser.
There are a few considerations to make when selecting a TPD insurance policy. This is in addition to checking the definition of TPD as it can vary between policies.
A few other factors that you could take into account include:
When zeroing in on an insurer - compare how long it takes for different insurers to pay out a TPD claim and the percentage of claims that they pay.
Own occupation or any? Some policies will pay if you are permanently unable to perform the duties associated with your own occupation. While others will pay if you are unable to perform any occupation for which you may be qualified or suited. Consider which of these circumstances you should be insured for.
Decide whether your TPD cover is to be included inside your super fund or a standalone policy. Nearly 90% of the 13 million Australians with a TPD cover are insured through their super fund, but this brings with it certain rules and regulations including the fact that TPD cover paid from a super fund is taxable.
A linked life insurance and TPD policy? It may be more cost-effective for you to purchase TPD insurance as part of a life insurance policy, rather than as a standalone product. Talk to a financial adviser regarding what suits you best.
Be wary of ads offering disability cover without any medical checks! This type of cover can be very limiting and that is why it is cheap. Always read the fine print so you know how your policy defines your cover.
Think about engaging a financial adviser who can help pick the right policy cover for you. Financial advisers can bring in their years of experience to determine which policy is most suited to your specific situation. And, when the need arises, they can help in submitting claims for all you are eligible to receive.
Why Are TPD Claims Delayed?
A recent study surveying claimants found that it was taking members an average of two years to lodge their TPD claims after they experienced disability. Some cases had delays stretching for as long as four years before any claims were made.
The reasons stated for such delay ranged from “I was not in the right frame of mind”, “I had other priorities at this time”, “I was planning on returning to work” and “there was a waiting period”.
Navigating claims after a gruelling experience can be tough. This is where a financial adviser can really help sort your documentation, read through the fine print for what you are eligible and make a timely claim on your behalf.
Why Are TPD Claims Disputed?
After the claimants submit claims, there may still be further challenges to encounter. Claims can be disputed and rejected by the insurer.
There are a number of reasons for disputing claims, such as –
Varying definitions for TPD – Discrepancies between what you and your insurer understand as the definition of TPD.
Ongoing requirements – Some policies require claimants to follow a specialist’s advice or go through rehabilitation.
Waiting periods – Most policies require a waiting period of up to three months before a payment can be made.
Exclusions – TPD payouts almost always include exclusions for pre-existing medical conditions.
A financial adviser can help assess, put your case together and submit your claim giving it the best chance for not being disputed or denied. Having worked multiple complex cases, they have the insight to drive your case and deliver favourable outcomes.
General Advice Disclaimer
The information contained on this website and in this blog-post is general in nature and does not take into account your personal situation or circumstance. It is recommended that you consider and use the information provided responsibly, and where appropriate, seek professional advice from a financial adviser.
Although, every effort has been made to verify the accuracy and correctness of information, Oakmont Financial Group, together with our consultants, officers, agents, and employees, disclaim all liability for any loss or damage suffered by any persons directly or indirectly relying on this information.