TPD claims: our guide to making a claim if you can no longer work

Wondering if you can make a total and permanent disability (TPD) claim? Here’s an overview of how the process works.

If you’ve suffered a serious injury or illness that has stopped you from working, you may be entitled to claim a total and permanent disability (TPD) insurance benefit. This guide will help you understand more about TPD claims, including what they are and how the claims process works.

What is TPD insurance?

Often referred to as disability insurance, TPD stands for total and permanent disability. It’s an insurance benefit you can claim following an injury or illness that prevents you from returning to work, either in the same capacity or in any capacity, depending on the policy. The TPD benefit is a lump sum payment that may be available through your superannuation, or you may be covered for TPD through a direct life insurance policy or as a standalone policy.

Compare Life Insurance

When can I make a TPD claim?

Your eligibility to make a claim will depend on your specific TPD insurance policy, so you’ll need to check your Product Disclosure Statement (PDS) and other key documentation. Eligibility requirements vary between insurers and products, but some common ones include:

1. The level of disability

In most cases, you’ll need to prove that you’re permanently unfit for your usual job, or possibly any other employment you may be qualified for based on your education, training and experience. This will depend on whether your policy provides “any” or “own” occupation cover (explained in more detail below). Additionally, the severity of your injury or illness may affect the total amount you receive, should your claim be successful.

2. Waiting periods

Most TPD insurance policies have minimum waiting periods of either three or six months before you can receive a payment. This is the period of time after the date of your injury that you haven’t worked, allowing time for symptoms to stabilise so the severity of your condition can be assessed.

3. Employment history

You may need to prove you’ve worked a minimum level of employment before making your claim. This could be a minimum total length of employment (for example, full-time for at least a year) or a set number of weekly work hours.

Unlike some other injury-related claims, with TPD you generally don’t need to prove your injury or illness was work-related or caused by someone else. You only need to show that it’s stopped you working and earning an income.

However, bear in mind that some TPD policies may have exclusions, meaning you might be unable to claim depending on the circumstances of your injury. Exclusions may include pre-existing medical conditions, injuries occurring at a hazardous occupation or an injury or disability that is not considered permanent.

What’s the difference between “any” or “own” occupation cover?

Each insurer has its own definition of what it means to be totally and permanently disabled and unable to work and earn an income. You’ll need to check your PDS to see if your policy covers you for either:

Any occupation – where you’re unable to work in any role aligned with your experience, training and education. This type of cover tends to be cheaper, but may be less likely to pay out as it’s harder to make a successful claim, according to regulator ASIC’s Moneysmart website.

Own occupation – where you’re unable to work in the job you had before your disability. This type of policy tends to be more expensive, but can be easier to prove, Moneysmart says.

Can I claim TPD for partial disability?

Some TPD policies will pay a benefit on permanent, partial disabilities for income lost if you can only work at a reduced capacity. That could be due to instances such as loss of limbs or paralysis, loss of sight or hearing. Check your policy or speak to your insurer to see what level of coverage is included.

How do I make a TPD claim?

To make a TPD claim, you’ll need to contact whoever you purchased the insurance from. While the claim process may differ slightly between providers, generally speaking it works like this:

Step 1: Contact your insurer, broker or super fund

Once you know whether you’re covered for TPD through a standalone policy, your superannuation or a direct life insurance policy, you can contact your provider and let them know you want to make a claim. Make sure you have your policy or member number available for a smoother experience. Each provider will have its own process from this point, and will be able to walk you through the next steps.

Step 2: Submit your claim with all evidence and documentation

Fill out the provided TPD claim form, making sure to include copies of all documentation and evidence of your condition. You’ll typically want to provide things like:

• medical reports
• employment details, such as hours worked, physical requirements and duties
• employer details
• income statements
• other relevant statements that support your claim

Once you submit your claim, you’ll likely be assigned a case manager to support your claim process.

Step 3: Your claim is assessed

Once you’ve submitted your TPD claim, you’ll have to wait for the insurer to assess your eligibility. Potentially, they may request further evidence from you, such as a second opinion or additional medical tests.

Step 4: An initial decision is made

Once your information has been assessed, your insurer will make a decision to accept, defer or decline your TPD claim. A deferred claim usually means further assessment is required.

Step 5: Your opportunity to respond if your TPD claim is initially rejected

If your TPD claim is initially rejected, you may be given the opportunity to provide more supporting evidence to bolster your eligibility, or you can potentially lodge an appeal. Additionally, in the event you’re not satisfied with the claims process or the decision made, you can make a complaint to your insurer or super fund.

You can also choose to hire a specialist TPD lawyer to support your claim process.

How much can I get with my TPD payout?

The amount of compensation you’re entitled to will depend on your circumstances and the level of cover under your policy. Potentially, if your TPD insurance is provided through your super fund, you may have been allocated a default amount or be on “age-based cover”, meaning the amount and cost of it changes as you get older. Alternatively, if you’ve taken out TPD insurance directly through an insurer, broker or financial adviser, your level of cover will be the amount you decided you needed when applying for the policy.

It’s important to check your policy details to confirm how big your TPD payout will be.

Related: Calculate your life insurance needs

How long does a TPD claim take?

After sending the TPD claim forms to your insurer, it can take between two to three months for straightforward claims, up to around six months for more complex cases. That’s being mindful that waiting periods can also impact this time. Difficult or disputed cases can take longer.

You can find out the average time your insurer takes to finalise a claim using MoneySmart’s life insurance claims comparison tool.

If you feel your claim is taking too long to be processed, the Life Insurance Code of Practice sets out clear timeframes for insurers to make their decision and keep you updated. You can complain to your insurer or to the Australian Financial Complaints Authority (AFCA) if these standards aren’t being met.

What happens if my TPD claim is rejected?

In the event your claim is initially rejected and you disagree with the decision, you are able to challenge it and request a reassessment. As each TPD product provider has its own eligibility requirements, you’ll first want to understand your insurer’s reasoning for declining your claim. Once you understand why your claim was denied, you can work on putting your case together to appeal.

You may need to:

• Gather evidence that proves the claim’s rejection and reasoning are wrong.
• File a dispute with your insurer or superannuation fund using its internal dispute resolution process.
• Patiently wait again for the outcome.

In the event your claim is again declined and you still disagree, you can take legal action and/or lodge a complaint with AFCA.

How to improve your chance of having a TPD claim approved

While it is usually possible to appeal if your TPD claim is declined, you probably want to give yourself the best shot at being approved the first time around. Here are some key things you can do to improve your chance of having your TPD claim approved:

• Provide as much information and supporting documentation to your insurer as possible
• Be cooperative with your insurance company
• Comply with any post-injury or post-illness medical requirements.

Compare Life Insurance

Main image source: SaMBa/Shutterstock.com