Many people around Australia, and particularly in Queensland, are members of Sunsuper. From 1 July 2016, Sunsuper introduced, with its insurer AIA Australia, a new insurance policy which provides a benefit called TPD Assist. This insurance policy is significantly different to the Total and Permanent Disability (“TPD”) insurance policy that Sunsuper previously provided to its members.
What are the differences between Sunsuper’s previous TPD product and its TPD Assist product?
The old insurance policy (pre-July 2016) and current Sunsuper TPD products are very different. It’s important to set out some of the features of the policy so that you can understand some of the features.
The most substantial change to the policy is that for most people seeking to lodge a TPD claim, if their claim is accepted, instead of receiving the full amount of the TPD benefit in one lump sum, they may only receive 1/6th of the TPD Benefit in the first instance.
After the first 1/6th has been paid, the member would need to wait approximately 1 year before lodging their TPD claim again and receiving the second 1/6th. This continues until the 6th year when a member receives the final instalment of the TPD benefit.
Here’s an example of how a claim through TPD Assist is calculated?
- John is a 45 year old normal worker who is covered for $132,000 of TPD Assist cover as a default.
- He has an illness or injury for which he makes a claim for TPD
- John’s TPD claim is accepted
- He will receive $22,000 as his first instalment (with some tax to be deducted from that amount).
- John will then have to lodge a further TPD claim in about 12 months time.
- If that is accepted, he will receive another instalment of $22,000.
- This process will continue until John has received all six years worth of entitlement.
Further to the annual instalments, the fund and insurer will where appropriate, require a member who is the subject of a TPD Assist claim to actively participate in occupational rehabilitation. Importantly, neither Sunsuper nor AIA are allowed to pay for medical treatment, and so it is only vocational and occupational assistance which can be provided. If occupational or vocational assistance is provided, it will be at the expense of AIA or Sunsuper.
Are their exceptions to the annual instalments payment method for TPD Assist?
There are some exceptions to the annual instalments requirement of the TPD Assist policy. This includes people who have suffered from certain specific medical conditions including:
- Multiple Sclerosis (MS);
- Major Head Trauma; and
- Parkinsons Disease, just to name a few.
If you’re suffering from one of those conditions and you have an accepted TPD claim, then your whole TPD benefit is paid out in one lump sum.
Does TPD Assist affect death benefit claims?
The payment of the TPD Assist benefit reduces the amount of any death cover by the amount of the benefit paid.
If you have been paid a 1/6th TPD Assist instalment and you return to work at some point and join a new super fund you will likely become completely ineligible for any TPD cover in any new super fund.
You should ensure you read your policy documents carefully.
Are you a member of Sunsuper and need assistance with your TPD Assist claim? Feel free to get in touch directly with today’s blog writer, Principal at Berrill & Watson, Paul Watson.