‘Total and permanent disability’ (TPD) insurance is an insurance product that lets you claim benefits if you become sick or injured (or both) and are unable to work as a result. What you might not know is that depending on the definition of TPD in your policy, you may still be able to make a successful TPD claim even if you still have capacity to do some form of work. If you can no longer work in your current job or occupation, being able to receive TPD benefits will be an important part of ensuring your financial wellbeing. This blog provides practical information on key definitions of TPD, and what they may mean for you.

My TPD claim has been accepted. Does this mean I’m not allowed to work again?

Every insurer and TPD policy is different. This includes how ‘total and permanent disability’ is defined, and the limitations this places on you in terms of working after your claim has been accepted. However, ‘TPD’ is usually defined to mean that that:

  • you must not ever work again within your education, training and experience,
  • you must not ever work again within your usual or own occupation
  • you must be unable to do your activities of daily living, or
  • you must lose the use of two limbs or your vision.

Some policies use only one of the above ‘definitions’ while others apply two or more. While the detail of your particular policy will require close review, it is possible to make a successful TPD claim without being required to cease all kinds of work all together. In addition to helping to pay the bills, we understand that for many of our clients, having the option of working in some capacity provides important social and health benefits.

‘Work-based’ TPD definitions

Most super-based TPD definitions are similar, and are generally ‘work-based’ in that they relate to your ability to work. To this end, they require that

  • you cease work due to illness or injury,
  • you do not work for either three or six months, and
  • at the conclusion of that three or six month period, you are unlikely or unable ever return to work in any occupation that you are reasonably suited to by education, training or experience.

However, sometimes TPD definitions have very different requirements and pay insurance benefits in significantly different ways.

Non-superannuation based definitions (for TPD insurance outside your super)

You might have a TPD policy outside of your super. Usually non-super-based TPD definitions are substantially the same as the ‘work-based’ TPD definition set out above.

However, sometimes TPD insurance benefits which are held outside of superannuation can include an ‘own occupation’ TPD definition. These require that you cease work and be permanently unable to return to your own occupation.

Under ‘own occupation’ TPD definitions, disputes can sometimes arise about what your own occupation is.

Hmm. My fund’s approach seems to be different to the standard definition. Why is this?

We hear you. There are some funds that do differ in their approach in important ways. 

For example, SunSuper’S TPD Assist pays a TPD benefit in six instalments over five years provided you can continue to demonstrate that you are totally and permanently disabled, as defined, or you suffer from a specific illness which causes you work incapacity. These include

  • major head trauma
  • Multiple Sclerosis (MS)
  • Muscular Dystrophy
  • dementia and Alzheimer’s Disease
  • Parkinson’s Disease
  • chronic lung disease
  • cardiomyopathy, and
  • paraplegia (including quadriplegia, hemiplegia and tetraplegia)

Other funds have TPD insurance arrangements for some of their members which

  • pay a percentage of the applicable benefit if you satisfy a TPD definition which is very similar to the ‘work-based TPD definition’, and
  • provide that to be paid the full benefit, you must demonstrate that you are unable to do a number of ‘everyday work activities’.

‘Everyday work activities’ relate to physical and other activities which are sometimes associated with work. These include (among other things) walking more than 200m on level ground, getting in and out of chairs, communicating (speaking or hearing) without assistance, and bending, kneeling or squatting.

However, if you are unable to work because you suffer from certain illnesses, you may not be subject to the above restrictions. Those include:

  • Parkinson’s Disease
  • dementia
  • arthritis
  • Osteoporosis
  • Motor Neurone Disease (MND), and
  • MS

Sound complex?

As you can see, the definition of TPD that your policy uses can impact your ability to make a successful claim – and, as a result, your future health and wellbeing. If you’re thinking of making a claim, it is worth getting high quality legal advice as soon as possible, so you can understand all of your options.

Don’t delay – seek advice now

Do you have an injury or illness that prevents you from working, or just want to know more about what insurance you have under your super? 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.

Please note that this information is intended to provide general guidance only. You should not act or refrain from acting on the basis of such information. Appropriate professional advice should be sought based upon your individual circumstances. For further information, please contact Littles.

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