The Australian Securities and Investment Commission (ASIC), following a study into various TPD insurance providers, found that many Australians were being tricked into bad TPD insurance. This blog will provide you with information on what makes a TPD insurance ‘bad’ and how to avoid them. 

What is TPD insurance?

Insurance for TPD is often provided through superannuation providers. It provides protection for people that face Total and Permanent Disability through monetary compensation. To qualify for most Total and Permanent Disability payouts, you must prove that you are not expected to fully recover from the disability you acquire. TPD definitions also require workers to show that they cannot undertake any meaningful work as a result of their disability. To read more about Total and Permanent Disability insurance in your state, click here. 

How do you get good quality TPD insurance? 

Getting good quality TPD insurance is arguably one of the most important things you can do during your working life. It not only protects you and your financial wellbeing, but also that of your family, especially if you are a sole provider or make the most income in your household. Good TPD insurance will have clear policies that are easy to follow, without any of the jargon that can easily be misunderstood. It is also handy for you to understand how the payouts work, as well as what you can get and when. If policies like this are labelled and easy to follow, it normally means that they are a good provider. You want to be able to fully understand what you are signing up for without the nasty tricks that may come with insurance policies. 

Some people have TPD insurance already

Most people already have TPD insurance without realising. It was previously provided through superannuation policies on an opt-out basis. However, in July 2019, new rules regarding Total and Permanent Disability Insurance came into play. This is because, in February 2019, the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 was introduced. Under these proposed laws, insurance would be offered by superannuation providers on an ‘opt-in’ basis, rather than the current ‘opt-out’ basis. These rules would be in effect where the member is under the age of 25 or the member has an account balance below $6,000.

What do ‘bad’ TPD policies look like? 

With the new changes to the law, it means that many people are now having to apply for TPD insurance again, allowing bad policies to come into play. ASIC has found that several companies are creating bad policies that could have a direct impact on you should you use this provider and face Total and Permanent Disability. Here are some examples of a bad TPD policy, as found by ASIC:

  • Several companies have created an ‘activities of daily living’ (ADL) test that is near impossible to pass. You have to be able to prove that you can’t do two or more of the tested activities. These activities include feeding yourself, walking, dressing, getting out of bed, bathing and using the bathroom. Very few people are injured to this point, and so fail the test. 
  • ASIC also found that a lot of insurance providers offer ‘junk’ TPD insurance. For people working casually or in a ‘high risk’ or ‘hazardous’ occupation, the extreme difficulty in making a successful claim means the insurance offers little value. 
  • Finally, ASIC found that insurance companies were ‘cold-calling’ customers to get them to buy TPD insurance without fully explaining the policies, essentially using scare tactics to get people to sign up. 

How can What’s My Claim Worth help? 

What’s My Claim Worth legal partners in New South Wales work on a No Win, No Fee basis, meaning that you only pay legal fees if your case is successful and you receive your claim.

If you do win, there are, of course, costs involved. What those will be, does depend on the costs of the TPD claim lawyer you work with and their solicitor’s fees and disbursements. This is an important conversation to have when you start discussing your case.

Why Choose What’s My Claim Worth? 

What’s My Claim Worth not only allows you to calculate the value of your TPD claim in New South Wales using our claim calculator, but we also work to connect you with our network of specialist TPD lawyers who can work with you to get you the best outcome — No Win, No Fee (excluding defendant costs if the claim is litigated).