How Do I Get My TPD Payout?
When you have a successful TPD insurance claim, your lump-sum payment is typically deposited in your superannuation account, where you can choose to:
- Withdraw the whole amount.
- Withdraw some of the payout and leave the rest in your superannuation account.
- Do not withdraw any funds.
How you manage your TPD claim payout will impact your tax obligations, so we recommend you get expert financial advice to maximise your entitlements. Please do this before removing any funds.
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What is TPD Insurance?
Total and permanent disability insurance pays a lump sum when you cannot work due to a physical or psychological disability. There are two main types of TPD insurance cover “Any Occupation” and “Own Occupation”.
Superannuation funds only provide cover for any occupation. It pays a lump sum when you can’t work again in your usual occupation or any other job you are suited for through education, training, or experience.
Own occupation pays a lump sum when you can’t work in your regular job, regardless of your ability to work in other roles.
TPD Payment Methods – What You Need to Know
When you have a TPD insurance policy through a superannuation fund, your disability insurance payout is sent to the fund before you are paid. Because of this, the payment can only be withdrawn after you meet a condition of release as set out in the industry regulations (SIS Act).
Own Occupation TPD insurance generally doesn’t meet these conditions, so super funds do not offer this type of coverage.
When your TPD claim is successful, there are three main ways a superfund will pay the proceeds. These are:
- Retain the funds in a holding account until you make a withdrawal or provide payment directions.
- Place the proceeds into a cash option within your super account.
- Place the proceeds into your super’s default investment option.
Superannuation Funds are Gambling with Your TPD Payout
Experts claim that roughly 50% of super accounts will choose the third option of these three options. Unfortunately, this means superannuation funds are gambling with your proceeds by depositing your lump sum payment in a share market account.
Most people want to access this money soon after a successful TPD claim. If you similarly wish to access your money, any daily change in the share market could cost you thousands, especially if there is an economic downturn or interest rate fluctuations.
How Our Expert TPD Claim Lawyers Help
At Splatt Lawyers, we’ll fight for your rights, so our experienced TPD claim lawyers will ensure you get paid in a desired and timely manner. Have peace of mind knowing our disability insurance legal services are 100% no-win, no-fee, which means you pay when you win and nothing if you lose. Choosing Splatt Lawyers to claim your TPD benefits means you will have a 99% chance of success. It’s free to start by calling 1800 700 125