Terms used in superannuation and insurance claims and contracts
When you are talking about your superannuation and insurance entitlements with your superannuation and insurance funds always ensure you clearly understand the meaning of each word used in your contract especially when you are a third party in a claim or an entitlement.
You may think it is unnecessary and pointless at the time, however it is essential as all superannuation and insurance claims and contracts outline, in fine details, their terms and conditions. You need to understand clearly from the start what you are entitled to, what you can claim for and what the terms and conditions are if you do lodge a claim.
To help you understand some of these terms and their meanings in your insurance and superannuation contract, most funds have a definition section to help translate these terms in plain English for you. It’s worth noting that unfortunately sometimes this definition section is lengthier than the actual superannuation and insurance claim or contract itself.
The majority of superannuation insurance on the market is deemed ‘event based insurance’. This means that what you are covered for depends on when the injury you sustained such as total and permanent disablement (TPD), temporary disablement (TTD), terminal illness or death happened. As an example, if your claim is a TPD the date you have stopped working is judged as the ‘date of disablement’. This is an important date as it could mean the start of your waiting period, which in most instances is 6 months, before you can be considered totally and permanently disabled and receive your payment.
How much money you will be entitled to receive if you are sick or injured to the extent that you can no longer work without major re-skilling is generally determined by the date you have ‘ceased work’ and the type of insurance coverage you have.
Cease work date
Your insurance policy will often define the ‘cease work’ date is when you have stopped performing your ‘important’ duties at work. However the date you ‘ceased work’ could also be defined as a time where you attended work but you performed special light duties. ‘Important duties’ term will also be defined in your superannuation contract as something like ‘duties that take up 20% or more of the occupational tasks’.
One general meaning of ‘ceasing work’ is that you are not doing any work at all. It is worth noting that the date that you stopped doing any work at all may be different to the date you ‘cease work’ and the two dates may correlate to being eligible to two different insurance amounts or insurance types.
Make sure you know and understand how your superannuation and insurance contract have defined these terms. It could be the difference between claiming $5,000, $50,000 or nothing at all.
If the superannuation fund or insurer advises you that you are or have not been covered at a particular date, ask them why and make sure it is in writing. Always remember that even though you don’t pay for these insurance premiums out of your ‘pocket’, you are still paying for them out of your superannuation account. If you pay these premiums, but you are still not covered it is important you clearly understand why not, so you are not denied a claim on the basis of not understanding your superannuation and insurance contracts.