Introduction

Total and permanent disability insurance (TPD) pays a lump sum amount if you are unable to work due to a disablement which is deemed total and permanent, and you are unable to work again. This benefit can be used to cover your mortgage repayments, pay for medical expenses that have arisen as a result of your injury, and provide ongoing financial support for your family. Definitions of total and permanent disablement vary between providers, so it is essential to read over the Product Disclosure Statement (PDS) of your insurance company to ensure you have a clear understanding of when you will and won’t be covered.

The Definitions of a Permanent Disability

A benefit is payable when you become totally and permanently disabled. A permanent disability is defined differently by each insurer, but will generally be:

  • Loss of sight
  • Loss use of limbs (arms or legs)
  • An absence from work for six months as the result of an illness or injury, where there is no expectation of you returning to normal work.

TPD Claim Time Limit

There is no time limit on when an TPD claim can be made for a benefit payment for TPD held within Superannuation. That said, there are time limits placed on when an appeal can be submitted for the refusal of a TPD claim. Legislation states that the Superannuation Complaints Tribunal can only review a complaint that has been made within two years after the making of the trustees decision of which the complaint is related to.

How does Total and Permanent Disability Insurance Work?

A TPD benefit is payable when the insured successfully meets the definition that is set out in the policy. There are two types of definitions being ‘own occupation’ and ‘any occupation that they are suited for by training, education or experience’. 

It important to note that the level of disability required for a lump sum payment on a successful claim can depend on your occupation – own occupation will give policyholders greater flexibility but is generally more expensive and only available to certain occupations.

The Difference Between ‘Own’ and ‘Any’ Occupation

Own OccupationAny Occupation
Under this definition, your benefit is payable if:

You have become permanently disabled you are unable to perform the duties of the usual occupation of your chosen field of employment for six months, and you are unlikely to ever return to work in your main full-time Occupation
Under this definition your benefit is payable if:

You have become permanently disabled you are unable to perform the duties of your regular occupation for six months, and you are still unable to do any occupation that you are suited to by education, training or experience