Many people have Total and Permanent Disablement (TPD) insurance to protect them and their family’s income if they are unable to work due to illness or injury.
People take out this insurance believing that they will automatically be covered if they become sick or are injured.
However, it is extremely important to read the fine print of any TDP insurance policy before you take it up.
Most TPD policies will only pay out insurance if an individual meets the criteria set down by the insurer.
Most insurance companies will only pay a benefit if an individual is unable to work in any capacity whatsoever in their normal trade or employment for which they are suitable based upon their skills, qualifications and training.
A further requirement of most policies is that the final decision is at the absolute discretion of the insurer.
It is important to understand that simply because you may not be able to work because of an injury does not mean that you will automatically be entitled to payment under a TPD policy.
If an insurer decides you will be able to work in some other form of occupation, however mundane the work may be and whether or not this type of job is available, then the insurer could deny paying a TPD benefit.
As such, even if you are not able to work in your normal occupation but the insurer decides that you could work in some other form of occupation which is not as strenuous or physical, then you could be denied an insurance benefit.
A common example would be where an individual is injured at work and has been off work for some time. If he or she is able to work as a console operator in a service station or operate the cash register at a supermarket then this could disqualify them from receiving their insurance benefit - even if they have not worked in this exact type of occupation before their injury or illness.
That the decision is at the absolute discretion of the insurer makes it even more difficult for individuals to obtain a benefit where the claim has been denied by an insurer. It is very difficult to challenge the insurer’s final determination.
It is therefore advisable that anyone who has TPD insurance or who is considering obtaining TPD insurance should carefully review their policy to ensure that they understand what criteria must be met before they can be paid any insurance benefit.
If you have any doubts, seek independent advice before you take up or renew the policy.