Total and permanent disability (TPD) cover is a common form of insurance that helps individuals cope with the financial difficulties that can arise from suffering a debilitating injury or illness.
As with any insurance, however, there is a chance that your claim will be rejected. Insurance companies and superannuation funds may provide a number of reasons for turning down a payout, such as not meeting the necessary criteria or failing to make a claim within a specified time period.
So how likely are you to be approved for a TPD claim in Australia? Let’s examine the latest statistics to see how often policyholders are paid, as well as what you can do if you feel a legitimate claim has been turned down.
Rejected claims in Australia
Sixteen per cent of TPD claims are declined, making it the most commonly rejected type of cover in the country, according to Australian Securities and Investments Commission (ASIC) data.
An ASIC study from 2016 revealed that trauma cover – also known as critical illness insurance – came second, with 14 per cent of claims rejected.
The company that provides your TPD policy could be a key factor in whether or not you receive compensation, as there were wide variations in approval rates between insurers.
One firm rejected as many as 37 per cent of cases, while two others turned down 25 and 24 per cent of claims, respectively. Conversely, at least one TPD provider paid out at least 93 per cent of the time.
Independent research firm SuperRatings said most policyholders should feel confident their insurer will provide cover when unforeseen circumstances strike. SuperRatings figures, published in the Australian Financial Review, found that 30 per cent of insurers approved between 91 and 100 per cent of TPD claims.
What are my options if my claim is rejected?
The ASIC study suggests that more than eight in 10 TPD claims are successful, but what if you’re one of the unlucky few who are rejected?
People with permanent disabilities cannot usually work again, sometimes leading to significant financial problems. TPD compensation can therefore prove a vital monetary lifeline for families.
If your claim has been rejected, get in touch with a specialist superannuation disputes lawyer as soon as possible to see whether or not you should pursue your case.
Gerard Malouf & Partners Superannuation Lawyers can help you gather evidence, offer no-win, no-fee legal advice and represent you in court should your case go before a judge. Contact us today for more information.