Your Super has Insurance Cover
Most people are aware their superannuation contains bank shares and other investments but are unaware that they have various insurance products such as life insurance and total permanent disability (TPD) insurance in their superannuation policy too.
The insurance products can be of significant benefit and are often of higher value than the actual superannuation balance. This is particularly so for those who may not have been a member of the fund for many years, or for people who have multiple superannuation accounts and therefore multiple insurance policies to claim on.
So what does total permanent disability mean, and how do we make a claim?
Each TPD insurance policy will have a definition of what total permanent disability means. In most cases the definition of TPD requires firstly that a policy holder be unable to attend work for three to six months due to illness or injury. Then secondly (after three or six months) the policy holder must be considered by the trustee of the super fund to be unlikely to ever work again in paid employment for which they are qualified by education, training or experience.
The second part of the definition has been the source of much confusion. Recently the NSW Supreme Court clarified some of these uncertainties in the case of Lazarevic v United Super. Here the court cited a range of previous cases and ruled that the term “unlikely to ever again work” required the court to consider the actual likelihood of an employer offering the
person paid fulltime employment.
So the court must consider the practical realities of a person actually obtaining work. It is not a theoretical question.
The court also ruled that qualifications are to be considered after the three or six month period of unfitness. The court approved an earlier case that said “it is irrelevant that an injured ballet dancer have the intellectual capacity to go to university, get a law degree and become a barrister. The injured ballet dancer would still be entitled to succeed in a TPD claim because re-training or obtaining qualifications later in life is not relevant”.
Each TPD policy is different. However many have common features such as those mentioned above.
This is a technical area of law and we recommend people who believe they may be entitled to make a TPD claim to obtain legal advice.
If you, your family or friends wish to enquire about a similar circumstance, please email us on our "Ask Us a Question" feature or call (02) 4228 8288 to speak to one of our specialist compensation lawyers.