This case study shows how perseverance and fierce advocacy can result in a successful outcome, even after years of unreasonable delay and multiple decisions to decline a total and permanent disablement (TPD) claim.
Our client’s chronic medical conditions, including multiple sclerosis, bipolar disorder and major depressive disorder, caused him to cease work. His TPD claim was declined twice because the insurer determined he hadn’t met the waiting period under the TPD policy and wasn’t TPD when he first stopped work.
We pursued a complaint with the Ombudsman, the Australian Financial Complaints Authority (AFCA) for our client, and after a three-year-long complaints process, the AFCA found in his favour, and he was paid the TPD benefit, plus interest for unreasonable delays.
This blog explains how even difficult TPD claims that have been declined multiple times can sometimes still result in a successful outcome with the right legal advice and advocacy.
Background Ralph’s TPD claim
When we first met Ralph (not his real name), like many Australians, he assumed his TPD claim would be unsuccessful as his TPD cover ceased shortly after he stopped work and the medical evidence at that time didn’t clearly demonstrate that he was unlikely to return to work again in his education, training or experience.
While it is important in a TPD claim to show that you became TPD under the policy while you were covered (that is, while the insurance was still in place and active), we confirmed with Ralph that if we could obtain medical evidence to show that his medical conditions had not improved after he ceased work, and had in fact continued to deteriorate, his TPD claim should be approved.
Claim denied at Internal Dispute Resolution (IDR)
We ran Ralph’s TPD claim, and even though we provided well-prepared evidence showing he was disabled from when he first stopped work, his claim was still declined on the basis that he had not become TPD before his insurance cover had ceased.
We pursued an internal appeal, and the insurer declined his claim a second time. The basis for our internal appeal was that Ralph was suffering from multiple permanent and degenerative medical conditions at the time he first ceased work, which would only get worse over time and that he was TPD as defined before his cover had ceased.
At this point, we had confidence in Ralph’s case and decided to pursue a complaint to the Australian Financial Complaints Authority (AFCA).
You can read more about appeal options in TPD claims in our earlier blog, “Three options to appeal a rejected insurance claim”.
Preparing Ralph’s case for a complaint with the Ombudsman, AFCA
As Ralph’s claim had been declined twice, we advised him to pursue a complaint with the appropriate Ombudsman, the AFCA.
To prepare the case for success at the AFCA, we exhausted all possible avenues to obtain further medical evidence to reinforce that Ralph was disabled at the time he ceased work and while his TPD insurance was still active.
We obtained historical medical records and reports, Centrelink records and Disability Support Pension records. As Ralph had ceased work a long time ago, it was difficult to obtain these records. As Ralph didn’t think he could pursue a TPD claim, he delayed lodging his TPD claim for several years.
Although it is possible to pursue a TPD claim years after you stop working, it is always highly recommended that you seek advice and/or lodge your claim as soon as possible after stopping work. Learn more in our earlier blog, “I stopped work five years ago due to illness. Can I still make a Super TPD claim?”
The AFCA found that the insurer had to pay Ralph the TPD benefit and interest
These further records, fortunately, supported Ralph’s TPD claim. With dozens of pages of legal submissions in support of his AFCA complaint, over six years since his TPD claim was first lodged, the AFCA found in Ralph’s favour.
As a result, the insurer had to pay Ralph his TPD benefit of $250,000 and $75,000 in interest.
Interest is payable when an insurer unreasonably delays paying an insurance claim. We had to make submissions in support of the insurer’s decisions to decline Ralph’s claims as being unreasonable, and that interest should be paid. These submissions were accepted by the AFCA and meant that Ralph got an additional interest payment to compensate him for these unreasonable delays.
You can read more about interest entitlements in our earlier blog, “When am I owed interest on my TPD or income protection benefit?”
What this TPD win meant for Ralph
Given the nature of Ralph’s medical conditions, he had not worked for over 10 years by the time his AFCA complaint was successful, and he received the TPD benefit and interest. Ralph’s only source of income and support was the disability support pension and the National Disability Insurance Scheme (NDIS).
With the payment of the TPD benefit and interest, Ralph was able to purchase some mobility aids not covered by the NDIS scheme and improve his daily living situation. He previously had no choice but to live with his parents, but was now able to move into his own place.
Why Ralph’s case matters for TPD claimants
TPD claims after cover has ceased are often more complicated than standard claims. Insurers tend to scrutinise these cases more aggressively, and even with well-prepared evidence a claim can be declined based on technical provisions under their policy.
Expert legal advice is crucial because:
- every TPD policy is different (some policies state that cover ceases as soon as you stop work, and others don’t);
- insurers commonly insist on clear medical certification from around the time you cease work to determine you became TPD while covered, if your cover has lapsed, which is not always available;
- medical evidence must be carefully prepared as soon as possible after you cease work if your cover has lapsed to clearly show you became TPD while still covered;
- claims can be further complicated if you have returned to work after your cover has ceased, however, we can help establish that a brief return to work was a failed attempt to return to work;
- if the claim is denied, there may still be reasonable prospects of success after an internal appeal, AFCA process or court process.
Many clients come to us after an insurer has declined their claim, only to find the denial can be overturned with the right approach.
Get help from a TPD lawyer
Ralph nearly abandoned his TPD claim multiple times. Each time we reassured him that his claim had reasonable prospects of success, encouraged him to persevere and advocated fiercely for him, getting him his TPD claim after over 6 years of work.
If you have had a declined TPD claim or your cover has ceased shortly after you stopped work due to injury or illness, and you are unsure whether you would still qualify for a TPD benefit, get in touch for some free advice.
We run TPD claims on a “no win, no fee” basis, and it costs nothing to find out where you stand.
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