Frequently Asked Questions 
If I am injured and I can’t work, what insurance benefits are available through superannuation?
What is the TPD benefit?
What are TTD benefits?
How is the disability claim assessed?
How do superannuation death benefits work?
Who can claim superannuation death benefit?
When are superannuation death benefits disputed?
What can I do if my insurer disputes my claim for income protection?
If I am injured and I can’t work, what insurance benefits are available through superannuation?
In the unfortunate event that injury or illness prevents your return to work or renders you incapable of working, the benefits that may be available to you and your family through your superannuation scheme generally fall into three categories: Total and permanent disability benefits, Total and temporary disability benefits and death benefits.
Disability insurance is usually in the form of:
- Total and Permanent Disability (TPD)
- Total and Temporary Disability (TTD)
With all these benefits, it is not necessary that you suffer injury through work, or even an accident that was caused by someone else. As long as you suffered an injury or illness that allows you to fit within the appropriate definition you are entitled to the insured benefit.
TPD stands for Total and Permanent Disability. TPD insurance is attached to most superannuation funds who typically buy it from an external insurer. TPD is defined differently by each fund / insurer but essentially the common criteria that must be satisfied are:
- You cease work due to injury or illness
- You have been absent from work for six continuous months
- You are unlikely ever to return to your usual job or any suitable work that fits your education, training or experience
Other examples of requirements that apply to specific funds are:
- You have participated in a rehabilitation program
- You are incapable of being retrained
- Your employment has been terminated
- Your condition was not pre-existing
The benefit payable is usually in the form of a lump sum payment.
TTD stands for Total and Temporary Disability. Some funds offer TTD benefits which are usually periodic payments if you can’t perform your usual job for a set period of time. Once again, the benefit is set in accordance with the fund rules or insurance policy and often your salary.
Before assessing your claim, the fund / insurer will require you to complete various application forms.
They may also obtain medical reports from your treating doctors and / or require you to undergo an independent medical assessment to determine the level of your disability.
It is very important to ensure that the correct information and medical material is placed before the fund at the time of the application as this will affect your right to challenge a decision later.
The claim assessment process usually takes between 12 and 18 months, with the insurer making the initial determination and then referring the matter to the fund to make their own assessment. The insurer and trustee must agree on the determination before it is conveyed to you.
If a member dies while superannuation contributions are being paid on their behalf, they will usually have death insurance. A superannuation death benefit can be paid out on top of contributions held by the fund on behalf of a deceased.
Superannuation death benefits can only be paid out to persons who are classified as dependants of the deceased (such as a spouse or child).
The trustee of the superannuation fund determines which claimants are dependants and what percentage of the benefit each claimant will receive, unless the deceased has signed a binding nomination form. Most nomination forms do not bind the trustee.
If the trustee of the superannuation fund decides that the deceased had no dependants at the date of death, the death benefit will be paid to the deceased's estate.
If there is a will, the death benefit will be distributed under the terms of the will. If there is no will, the law will determine who will get the estate and the death benefit will be distributed in the same way.
Disputes may arise regarding a trustee's decision, particularly if the deceased died leaving a dependant spouse and children from an earlier relationship. Or if the trustee determines not to pay the death benefit because it believes that an exclusion, such as suicide or AIDS, applies.
If you are in dispute with your insurer over your entitlement to income protection, Slater & Gordon strongly recommend that you seek prompt legal advice. This is a particularly complex part of the law. Insurance companies are powerful opponents. You will need sound advice and experience if you wish to successfully challenge them.
Generally disputes about income protection insurance arise on two grounds.
The first is that the insurer is of the opinion that you do not satisfy the requirements under the policy. For example, even though you claim that you are unable to work as a consequence of injury or illness, the insurer forms the opinion that you are able to work.
Alternatively, the insurer alleges you failed to disclose certain information to them that was relevant to them accepting you as an insurance risk. For example, you may not have disclosed a previous back injury on your application for insurance and, on making a claim for an unrelated injury / illness, the insurer discovers your prior medical history.
The insurer has, in certain circumstances, the ability to cancel the policy from inception and refuse payments under the policy. Often the decision is incorrect and a tactic to dissuade you from further pursuing a claim.
If you have a dispute with an insurer, you have the right to challenge the decision made. Each case is assessed on its individual facts according to the level of alleged non-disclosure or the weight of the medical evidence.