INSURANCE; INCOME PROTECTION AND TPD

It is surprising that many people do not know that their superannuation may include insurance which offers certain benefits if they are unable to work on a temporary basis or permanently, in an occupation for which they have the education, training or experience.

In may instances, details of the insurance cover is included in the personsĀ  annual superannuation statement. Occasionally, the person my have the insurance cover pursuant to a policy not forming part of the persons superannuation arrangements.

Income protection insurance, as the name implies, provides a disabled worker with income payments calculated at a certain percentage (usually 75% plus super) of the persons pre disability income, limited to a certain period of time eg 2 years.

The injured worker may also qualify for a lump sum total and permanent disability payment depending on whether the worker’s circumstances fit within the definition of “Total and Permanent Disablement” in the relevant policy.

The process initially involves;

  • carefully reviewing the persons most recent superannuation statement;
  • determining what benefits are included in the policy;
  • contacting the insurer to “register” the claim and have the insurer provide a “claims pack” with all the relevant claim forms;
  • completing the claim forms and in some cases, obtaining a report from the persons treating GP and/or specialist;
  • submitting the completed claim forms;
  • assessing the insurers decision in relation to the claim

Unfortunately, the processing of these claims can be extremely protracted. Whilst most insurers agree to be bound by the service standards in a Code called the Life Insurance Code of Practice, these standards are not always met.

Once the claim is determined, any disputes can usually be resolved by applying to the Australian Financial Complaints Authority which is an independent dispute resolution body offering an alternative to potentially costly court proceedings.