Sarah’s hidden insurance meant she could spend time with loved ones in the last year of her life
Published on December 12, 2019 by Lucinda Gunning
Like most of us, the first time Sarah* (name changed) thought about insurance she might hold was after a crisis event, in her case a devastating diagnosis of terminal cancer in her mid 30s. Unfortunately for Sarah the usual types of insurance that most Australians are familiar with – such as workers compensation (if they were injured at work) or CTP scheme (if they were injured in a car accident) – did not cover her circumstances.
For Sarah her TPD or Total Permanent Disability Insurance would prove invaluable – but like millions of other Australians Sarah didn’t even know she held TPD insurance through her superannuation.
TPD insurance is available for people like Sarah who are unable to return to work following a serious injury or illness or terminal diagnosis. Unlike workers compensation or CTP insurance, TPD is a fixed sum insurance and there is no need to show your injury has a connection with employment, or was caused by the negligence of another person.
In Sarah’s case her diagnosis meant she was unable to work for the final year of her life before she passed away. After speaking to a lawyer, Sarah checked her superannuation and to her astonishment she found she had $600,000 in TPD benefits available to her, which she was able to access immediately due to her condition. Sarah used this payment to fly her family from overseas, and cover their expenses and lost income for their time off work so they could spend time with her in her final few months.
Access to TPD is not just limited to a diagnosis of terminal illness and the majority of people who submit TPD claims have been diagnosed with a condition that will prevent them from working.
To access a TPD payment, you must meet the definition in your individual policy. Generally there are two broad types of policy definition, known as “own occupation” and “any occupation”. The definitions will usually look something like this:
- “The injured person must be unlikely to ever work again in any occupation for which they are reasonably suited by way of education, training or experience”; or
- “The injured person must be unlikely to ever work again in the occupation in which they were working at the time they became totally and permanently incapacitated”.
“Own occupation” definitions are rare in superannuation policies, meaning to gain access to a TPD benefit most people must meet the more onerous definition of showing that they will be unlikely to ever work in any occupation.
If you have suffered a life changing injury preventing you from working, you should check your superannuation policy to see what type of insurance you hold. You should also check for any lost super, which may still have an active TPD policy attached to it. If you find you have TPD or income protection insurance you may want to consider engaging a lawyer to help you apply for access to your benefit.
If you have been injured or are suffering from a debilitating illness Carroll & O’Dea Lawyers can help guide you through what insurance and compensation options might be available to you.