While many people may have seen the acronym ‘TPD’, possibly in connection with their superannuation policy, they may not be aware of what it stands for or what it means.
Total and permanent disability – TPD – is a form of insurance accessed by those who unfortunately experience illness or injury which prevents them from being able to work again.
A person may contract a disease, be involved in a terrible accident or suffer some other trauma, for example, which seriously affects their ability to make a living in the future.
A successful claim allows a person to financially support themselves and their family for the remainder of their life.
These days, many TPD policies are included as part of a person’s superannuation fund. TPD insurance can also be purchased as a separate policy through an insurance company, a financial adviser or an insurance broker.
Some TPD policies may also be part of a life insurance policy, where the amount of life coverage will be reduced by any amount paid out on a TPD claim.
TPD policies can be complex and lengthy documents, providing a lot of ‘fine print’ on how the policy works and what exclusions might prevent a pay-out to someone claiming under the policy.
The advice and guidance of professionals with years of experience in making TPD claims are highly advised, so call Personal Injury Lawyers Sydney today for a free appraisal of your circumstances.
How do TPD policies work?
TPD insurance policies commonly take one of two forms.
One type of TPD policy is ‘own occupation’, which provides cover if you’re unable to work again in the specific job or industry you were working in before your disability.
Then there are ‘any occupation’ policies, which may provide financial coverage if the illness or injury you suffered prevents you from ever being able to work again in any job suited to your education, training or experience.
Own occupation policies, because of their specificity to your circumstances, are generally more expensive than any occupation type.
In order to take out a TPD policy, an insurer will require extensive personal information, including age, occupation, medical history, family medical history, your lifestyle (smoking, level of drinking, etc), and high-risk sports or hobbies.
The information provided to an insurer must be honest and accurate otherwise it may later decline to pay out a claim. Personal information, once accepted, will be used to set the number of your premiums and the other terms and conditions of the policy.
In terms of premiums, TPD insurance typically consists of either ‘stepped’ premiums – which are recalculated each time the policy is renewed and increase to reflect advancing age – and level premiums, where a higher premium is initially charged but further increases occur more slowly over time because they aren’t based on age.
Common TPD claims
There are many reasons a person may have cause to make a TPD claim.
Cancer, heart disease, stroke, loss of senses, loss of a limb, anxiety, PTSD, depression or infectious disease may all leave a person in a position where they are unable to satisfactorily undertake or complete the duties of their usual occupation, or any occupation.
Making a TPD claim
A successful TPD claim will generally be paid as a lump sum to meet your living and medical expenses in the future. A claim made through a TPD policy held within a superannuation fund will pay a lump sum, in addition to the amount in the fund.
As mentioned earlier, in order to make a claim the policy-holder will be required to show they can no longer work in their job, or another job based on their education, training and experience.
Some TPD claims may also require the claimant to be retrained for a different type of job to one they’ve held before.
A person’s age, circumstances and the conditions of the policy will determine how much can be claimed. If a person holds more than one super fund, more than one TPD claim is possible.
The illness or injury that caused incapacitation does not need to be work-related and covers any illness or injury that means a person can’t work.
An injury that has been caused by a work-related or motor vehicle accident, for example, is not a bar to making a TPD claim in addition to any workers’ compensation or compulsory third party motor vehicle accident claim.
Time limits and the importance of legal advice
Unlike most claims for compensation, a TPD claim can be made long after a person stops work.
Speaking with specialists in compensation law such as BPC Lawyers is essential in making a TPD claim, given the complexity of some policies and the challenges an insurance company may make to the claim.
Insurance companies will often reject TPD claims by asserting that the claimant is still able to work in some capacity. An experienced lawyer can help the claimant through the claims process and investigate avenues of appeal should the claim be rejected.
Making a TPD claim can be a stressful experience when you’re also dealing with illness and injury. An investigation by the insurer into how the injury was sustained and the medical assessment of it afterwards can be a lengthy and exhausting process.