SuperTalk Blog

Has an obscure definition of TPD by your super fund resulted in your claim being rejected?

 


Has an obscure definition of TPD by your super fund resulted in your claim being rejected?

We are experts in TPD insurance claims and this week our very own John Berrill has reminded us why, with his contribution to the Sydney Morning Herald article “Life insurance braces for Hayne grilling”.

The focus of the article is Paul Chapman, a client of Berrill & Watson, who has been fighting his superannuation fund and insurance company for years trying to get the TPD benefit payout which he is entitled to.

TPD definition likens BT Superannuation insurance to “junk insurance”

Like millions of Australians, Paul has TPD insurance in his superannuation. However, because Paul worked in what his super fund, BT Superannuation, classes as a hazardous occupation, the insurance he was provided was not the ordinary TPD definition available to most Australians (which pays out if you cannot work) but a much harder definitions to fulfil. It’s called an Activities of Daily Living (“ADL insurance”) definition. Paul had no idea that he would have to satisfy under this definition before he made this claim.

John Berrill likens ADL insurance to “junk insurance” and says that BT Superannuation offering this insurance in such an opaque manner could be illegal. In Paul’s case, under the BT Superannuation ADL definition, to be TPD he must show that he cannot do any two of the following:

  1. Bathing;
  2. Toileting;
  3. Moving (walking, getting in and out of chairs etc);
  4. Dressing; and/or

Despite Paul being so severely disabled that he struggles to walk without the assistance of sticks, crutches or a frame, needing help to dress and standby assistance to shower and toilet, BT Superannuation and its insurer will still not pay him a TPD benefit.

Not all super funds and insurers are equal

Paul’s case is shocking; however, we don’t want people to think that all superannuation funds and insurers offer such crumby insurance. They don’t.

When Paul first ceased work, he claimed on his CBUS TPD insurance policy and was paid without incident.

Paul’s situation teaches us a very important lesson about super and TPD insurance, which is that TPD insurance in superannuation is, for the most part, a good thing and it should continue to be offered in a default manner to superannuation members.

As Berrill says “this model has worked so well over the years to deliver affordable life insurance to millions of Australians, but its been undermined recently by some poor and frankly illegal practices”. However, there needs to be more oversight to ensure that the ADL like that offered by BT Superannuation that gives little to no value its members, is eradicated.

Read the full Sydney Morning Herald article here.

If you need assistance with your TPD claim whether it’s been rejected, it’s taking too long or you’re simply not aware of your rights and entitlements, get in touch with today’s blog writer, Tom Cobban.


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