Did you know that your superannuation includes more than just the balance of contributions made by your employer and any personal contributions? Did you know that superannuation could also include an insurance for total and permanent disablement (TPD)?
Did you know that you do not need to be catastrophically injured to claim TPD insurance? Read on to find out more about superannuation TPD insurance and whether you can claim.
What is TPD?
If you are ill or injured you may be entitled to make a claim for TPD in your superannuation insurance policy. TPD is part of the insurance in of your superannuation coverage, and is separate to the balance of funds in your superannuation account. Insurance could include TPD, partial and permanent disablement and death. Not all policies include an automatic insurance coverage and it is important that you check to see whether you are covered. Your annual statement will indicate whether you have insurance cover and, if so, what for and the amount of your insurance coverage.
TPD means different things in different superannuation policies. Sometimes, the policy definition changes over time. You do not have to be catastrophically injured to qualify for a TPD payment. Often, there are several categories of injury and/or illness, which meet the policy definition of TPD. For example, the total loss of sight may qualify for TPD but the same policy may also include someone who, because of illness or injury, is absent for work for a certain period (the waiting period) and at the start of the waiting period and after that, is unlikely ever to engage in any reasonably suited occupation based on the insured person’s education, training and experience. A statement completed by the injured person and their Doctor/s are considered in determining whether an insured person is TPD. Those statements are important and should be completed fully and correctly to ensure the information is accurate and consistent. Obtaining legal advice and representation at an early stage can maximise chances of have your claim accepted as soon as possible.
What happens after your TPD is approved?
If your TPD claim is approved you have several payment options. You can take some or the entire TPD insurance amount, in addition to some or all of your superannuation account balance. It is important that you receive financial advice from an appropriately qualified person before electing a payment method. Your policy may close your entire superannuation account and cease any remaining insurance if you take a full payout of insurance and your balance. In addition, your TPD claim may offset the amount of any remaining insurance. For example, your policy might provide that a death benefit be offset by the value of TPD insurance. If the death benefit is $200,000 and the TPD insurance is $75,000, then the death benefit would be reduced to $125,000 after you become entitled to a TPD payment (i.e. $200,000 less $75,000).
If you have a work injury or illness, a TPD payment is made in addition to impairment compensation under workers compensation legislation. That is, you can be entitled to lump sum compensation in workers compensation and superannuation. However, your injury or illness does not have to be work related to claim TPD.
For an obligation free phone consultation, contact us on 8213 1000.