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Australians kept away from work due to illness or injury could be missing out on millions of dollars in cash benefits, with new research showing less than half are aware their superannuation funds includes total and permanent disability (TPD) insurance coverage.
A survey of more than 1000 Australians, commissioned by national law firm Slater and Gordon, found only 47 per cent knew TPD insurance coverage was built into most superannuation accounts. The research showed understanding of the benefits associated with TPD coverage was even less (see survey snapshot).
Slater and Gordon Superannuation National Practice Group Leader, Dina Tutungi said the awareness gap meant Australians were missing out on payments that could assist them if they were ill or injured.
Ms Tutungi said TPD coverage existed to help people when an injury or illness prevented them from continuing work in their normal job, regardless of whether the injury or illness was related to their employment.
“Knowing that you have insurance cover to assist you in these circumstances is important for your peace of mind and can help relieve the financial pressure that comes from a decreased capacity to work,” she said.
In most cases, TPD insurance is included as a default cover when members join a superannuation fund.
Last year, according to the Australian Prudential Regulation Authority, Australian workers contributed to more than 30 million superannuation accounts and most of those accounts have built-in TPD insurance policies.
“Unfortunately most people who make super contributions are missing out on the peace of mind that comes with knowing they are insured and, more importantly, those that do fall ill or succumb to injury may be suffering unnecessary financial hardship simply because they do not know they are eligible for benefits,” Ms Tutungi said.
She said while TPD benefits generally ranged from a few thousand dollars to hundreds of thousands of dollars, the average TPD benefit value paid to her clients was about $100,000.
“Most people who come to us know nothing about their TPD coverage in their super and it’s only when we bring it to their attention that they even know that they can make a claim,” she said.
TPD insurance premiums paid by Australian workers usually range from $50 to $480 a year, with premiums automatically deducted from superannuation accounts.
Ms Tutungi said it was important that Australians understood their entitlement to claim under superannuation TPD policies.
“The results of our survey clearly point to a need for some greater education around these issues, however in the meantime we would urge all Australians with superannuation funds to carefully check their superannuation statements to see if they are covered.”
Slater and Gordon has established a website to assist people to understand TPD coverage. For more information on superannuation click here or visit www.superannuationclaims.com.au