Successful TPD Claims
The simple answer is, yes, if you have multiple TPD policies you should be able to make a claim on all of them for the same illness or injury.
With total and permanent disability (TPD) insurance cover, there is no limit on how many different policies a person may have, and then if they suffer and illness or injury and don’t expect to be able to work again, they can make a claim against all these policies.
As with all things there can be exceptions to this rule, some insurers in the past have tried to enforce restrictions on multiple claims against TPD policies, but these restrictions are rare in most cases people can claim on all the TPD policies.
The record I have seen personally is 7 TPD policies, I assisted a lady to years ago who had seven different TPD policies, six of which were held through different superannuation accounts, and one was outside of super. She was diagnosed with MS and successful in claiming on all of these policies.
In fact, even if the persons TPD policies have lapsed, so long as the TPD policy was in force at the time they became TPD’d, then they will likely be able to claim. This is why it is important to do very thorough investigations into this person’s superannuation and insurance history to see not just what cover they have now, but what they have had in the past.
We will likely see less people with many super claims moving forward. In 2019 the government introduced rules to automatically cease insurance cover on low balance in active super accounts. At the end of 2019 super funds were required to write out to their members within active super accounts to notify them that their insurance will cease if they didn’t elect to continue this cover. This will benefit many people by reducing insurance premiums they’re paying, but it will seriously
disadvantage other people who already had health issues and subsequently have had to make a claim on their TPD policy only to find that one or more of their policies have been cancelled due to this new legislation.
OTHER TYPES OF INSURANCE COVER
You can usually make multiple claims on lump sum insurance cover, but not on ongoing insurance cover (like Income Protection or Salary Continuance).
With Death (or Life) Cover – the same applies where a person can claim on multiple different death cover insurance policies with no limit.
Income Protection (or Salary Continuance) – is different. With income protection policies, it’s likely you won’t be able to claim on all of the policies, or they will offset each other. Income protection policies pay you an income if you’re unable to work due to illness or injury.
Income protection policies have a “waiting period” which is the period the person has to be off work for before they can start receiving their income payments. The standard waiting periods are: 1 month, 3 months or 2 years.
Then the policy will have a “benefit period”, which is how long the payments will continue for. The most common benefit periods are: 2 years, 5 years or to age 65.
Income protection payments are usually capped at up to 75% of their pre-disability income. The reason you can’t claim on multiple income protection policies is because you could potentially be receiving more income when not working when compared to the income you earn while working. This means income protection polices will offset each other AND other types of income may offset (ie reduce) your income protection payments. There is a lot of variation between income protection policies, so it is important to understand each policy.
Disclaimer: please understand this information is general information only, it is not financial advice, please do not make any financial decisions based on this information please seek financial advice before taking any action.
