Total & Permanent Disability Insurance & Claims Guide

Although total permanent disability insurance (TPD) can be complex, ActOn Wealth’s financial advisors support clients by translating the jargon and navigating through the red tape. 

In this article, we explain everything you need to know about disability cover and claims. We also explain how our financial planners can help, whether you’d like to set up your TPD cover or submit a claim. Whatever you need to know about TPD insurance and claims, find it here or ask our team for more information.

What is TPD Insurance

TPD insurance, or Total Permanent Disability insurance, protects in the event of one becoming permanently disabled or incapacitated and therefore no longer capable of providing for themselves and their dependents. It is provided in a lump sum payment to fund ongoing treatment and care.

ActOn Wealth Total and Permanent Disability Services

You can rely on ActOn Wealth’s Melbourne financial planners to: 

1. Recommend the best total permanent disability insurance for you 
2. Assist you in submitting a strong total and permanent disability claim 

We know it can feel overwhelming trying to understand insurance, and we understand making a claim can be stressful and emotional. We’re here to make either process more manageable, easy to understand and as stress-free as possible. We’ll look after you right the way through. Here’s a more detailed summary of what we can do: 

Total and Permanent Disability Insurance Advice

Part of wealth building involves protecting your finances. Why go to all the trouble of creating financial security if your finances are, in fact, ultimately not secure? We’re big proponents of wealth protection, so finding the right TPD cover for our clients is paramount. 

When it comes to life insurance advice, ActOn Wealth is pedantic about the details. Terms and Conditions aren’t just a box to tick; they must be scrutinised and fully understood. Our financial advisors pour over the details to make a recommendation that is right for you and your budget.

Assisting With a Disability Claim

Disability claims can feel overwhelming. A lot is riding on their outcome, and getting everything right is important. Moreover, the very fact you are making this claim means you’re likely going through physical and emotional trauma. 

That’s where ActOn Wealth can assist. Our priority is to help you by removing as much claims-related stress as possible and ensuring the best possible payout. 

We’ve been through this process countless times for clients and we know the ropes. You can rely on us to:

1. Contact the insurer to confirm if a claim is worthwhile

You’re about to put a lot of effort into this process (with our help), and you need to be confident it has every chance of success. We know the right questions to determine a claim’s likelihood of a positive outcome. 

1. Collate and pre-fill paperwork

There is typically a considerable amount of paperwork involved in TPD claims. Don’t worry – we’re here to wade through the bulk of it and take it off your plate. 

1. Review all items 

This step is crucial in quality control checking. We don’t want any room for error – we must get this right the first time. The insurer will then appoint a claims assessor.

1. Serve as an intermediary 

At this stage, we step into an advisory and translator role. We’re there to digest all the jargon and red tape outlined by the assessor and present it to you in a digestible format. 

Now you know more about how ActOn Wealth can assist you, let’s answer some specific questions.  

Can I Get Superannuation TPD Insurance?

Depending on your fund type, it could be possible to take out superannuation TPD insurance. That said, there are pros and cons, so it’s important you go into this eyes wide open (which is precisely what we’re here to help you do). For instance, your premiums through a super fund might be cheaper than those outside a fund. However, on the flip side, to receive a payout, you must meet the definition of total and permanent disability as per Australia’s Superannuation Law. 

We’re not even touching the sides of the various advantages and disadvantages. Indeed, this can quickly become a complex matter, and there is a wealth of information to digest. We recommend meeting with our ActOn Wealth financial advisors for bespoke superannuation fund advice. 

Do I need TPD Insurance? 

Whether you require total permanent and disability insurance depends on your risk profile and how much you stand to lose. ActOn Wealth financial planners ask a series of specific questions to objectively determine your risk threshold. 

However, regardless, we strongly believe in taking out insurance to safeguard your wealth. It seems counterintuitive to put so much effort and energy into growing wealth only to lose it in the event of an accident, illness or injury. A reasonable monthly payment is a small expense for peace of mind and protection.  

How Much TPD Insurance Do I Need?

The amount you need could depend on:

• The amount required to repay your mortgage and other debts
• Home modifications and/or rehabilitation required due to your disability
• Nursing or other medical care you might require 
• Ongoing household expenses
• A lump sum to invest to replace your lost income
• The amount required to ensure your kids can complete their education

What is a TPD Claim?

TPD claims refer to a lump sum payment made by insurers if one becomes totally and permanently disabled or incapacitated. It is essential to be aware that the definition of total and permanent disability can vary among insurance companies. Again, ActOn Wealth is available to help translate these nuances so you are aware before you take out cover.

How Long Does a TPD Claim Take in Australia?

The insurance assessor must gather information about your employment, medical evidence and records, financial history and the event that led to your TPD claim. 

The waiting period for TPD claims can typically take three to 12 months, depending on the complexity of the case, the comprehensiveness of supporting documents and evidence, the size of the expected payout, and the involvement of any third parties and the insurance provider. 

Another factor contributing to TPD claims process delays is obscure or incomplete information from the claimant. ActOn Wealth can help minimise such delays by ensuring all paperwork is correct and readily available. 

Can You Claim TPD Insurance on Tax?

Generally TPD is not tax-deductible if owned personally, but can be tax-deductible if owned via superannuation as it’s paid for with pre-tax dollars and can attract a 15% tax rebate. 

If owned through super, tax can also be paid on the benefit depending on the client’s age and eligible service date.

Can You Work After a TPD Payout?

You might think the very nature of “total and permanent” means you can never return to work (or at least, not unless you refund your payout). However, that’s not the case. 

The payout is made based on your total and permanent disability at the time of the payout. If things improve, and you can take on some working hours here and there, you may do so. However, you must report everything transparently in your tax return. 

We hope this article has been a big help in providing you with all the information you need about total permanent disability insurance, claims and payouts. ActOn Wealth’s team of Melbourne financial advisors is here to help you with specific, tailored advice, not to mention full support in the event of a claim. Contact us and see how we can assist you.