Having Total and Permanent Disability (TPD) insurance gives you a financial lifeline if you’re forced out of work due to a serious injury or illness. Even if you have cover, you may not know how to make a claim or how long it will take to receive a payout if you’re approved. That is exactly what this guide to TPD claims will explain.
While TPD claims in Australia typically take between 6 to 12 months from lodgement to payout (or less), complex cases may be longer. Understanding the timeline and process can help you know what to expect and how to prepare for the future. If you’re unsure, have questions or need help with a delayed or rejected claim, a superannuation or TPD claims lawyers, like our team at Main Lawyers, can support you with information and guidance.
How does a TPD claim work?
If you have Total and Permanent Disability (TPD) insurance, you can make a claim for a tax-free lump sum payment if you become unable to work again due to serious illness or injury. The goal is to provide you with financial stability when medical evidence supports you are unfit to return to work. There are multiple types of TPD insurance you may hold, including:
- Own occupation TPD, which is typically a more expensive type of insurance covering you if you’re unable to work in your specific or current profession due to permanent disability from injury or illness.
- Any occupation TPD, which has stricter definition of disability, but protects you if you are unable to work in any occupation.
- Home duties / domestic duties TPD, designed for people who don’t work (such as a spouse) and are no longer able to perform domestic duties, such as cleaning, cooking, child-rearing or leaving the home.
Most people aren’t even aware they have TPD cover or have multiple coverages as it’s often included in many superannuation funds. If you have multiple TPD policies, you may be able to make multiple claims, however, eligibility and criteria vary between insurers.
How long does a TPD claim take?
Unfortunately, TPD claims take as long as they take. This can be around 6 to 9 months or even as long as 2+ years for complex, contested claims. Here’s a breakdown for what you may be able to expect.
Handling the claim or dispute yourself can also stretch out how long it takes to settle a TPD claim, especially if disputed. A TPD lawyer can help you streamline the process and help avoid any delays.
How long does it take to get a TPD payout?
How long it takes to receive your TPD payout can differ a little depending if your insurance is through your superannuation or an independent insurer. If your cover is with an independent insurer, you should receive the funds within 2 to 6 weeks. For cover held within your superannuation, there’s an additional layer of review.
As the amount gets added to your superannuation balance, your superannuation fund trustee must independently assess and approve the release of this amount. This can add up to a further two months on top of the insurer’s decision. Once approved, it is typically paid within 2 to 4 weeks.
The TPD Claim Process
The TPD claims process can look a little different depending if your policy is held through your super fund or an independent insurer. However, it typically looks like:
- Assessing your policy for eligibility and waiting periods. Most policies require you to wait at least 3 to 6 months before you are eligible to lodge a claim to help determine permanency of the effects of the injury or illness.
- Gathering evidence to support your claim, such as medical records, specialist assessments, employer statements, payroll records, tax returns and functional capacity evaluations.
- Lodging your claim form directly to the insurer or your super fund, depending where your policy is held.
- Waiting for the insurer to assess the claim, which can take between 3 to 12 months, or more.
- Receiving the insurer’s decision whether your claim is approved or rejected by the insurer, or if they need more information.
- Awaiting assessment from your superannuation trustee, if your policy is held as part of your super.
- Receiving your payout.
Why is my TPD claim taking so long?
Delays in TPD claims are frustratingly common, even when the case is clear. In most cases, it’s often caused by incomplete or inconsistent documentation, so the insurer needs to request more information to clarify or confirm details. Other common causes of delays to TPD claims include:
- Waiting for doctors or specialists to prepare detailed medico-legal reports.
- Accessing payroll records or employer statements, particularly from former employers.
- Where there are multiple super funds.
- Doubts from the insurer in the permanency of the injury or illness and its impacts on your ability to work in line with the policy.
- For mental health conditions where capacity is harder to quantify.
Working with a TPD lawyer can help you reduce or avoid common delays, pre-empting objections from the insurer for a clear process.
Your rights if your TPD claim is delayed or denied.
You are not powerless if your TPD claim is being delayed or has been denied. Under Australian financial services law, insurers are obligated to act in good faith and handle claims within reasonable timelines. If you believe your insurer is not acting reasonably, you can:
- Contact your super fund or insurer’s dispute resolution team.
- Lodge a complaint with the Australian Financial Complaints Authority (AFCA).
- Seek legal advice and representation from a specialised no win, no fee TPD or superannuation lawyer who can help you with the process.
If you’re stuck with your claim, you can request a free quote from Main Lawyers to help get the details you need to make informed decisions. You can also use our free claim estimate calculator to see what you may be eligible to receive.