What is TPD Insurance?
Total and Permanent Disability insurance is a lump sum insurance paid when you become unable to work. There are two main types of TPD cover “Any Occupation” and “Own Occupation”.
- Any Occupation is the only cover offered by super funds. It pays a lump sum when you can’t work again in your own occupation or any other occupation in which you are suited through education, training or experience.
- Own Occupation pays a lump sum when you are unable to work in your occupation regardless of your ability to work in other occupations.
TPD payment methods – What you need to know
As the TPD policy is owned by the fund, any payment is paid to the fund before being passed to you. This means the payment can be withdrawn only after you meet a condition of release as set out in the industry regulations (SIS Act). Own Occupation insurance generally doesn’t meet these conditions which is why they are not offered within super funds.
When your TPD claim is successful there are three main ways a superfund will pay the proceeds, these are:
- Hold the funds in a holding account until you make a withdrawal or provide payment direction
- Place the proceeds into a cash option within your super account
- Place the proceeds into your super’s default investment option
Super funds are gambling with your proceeds
Of these three options, experts claim roughly 50% of super accounts will choose the third option. Unfortunately, this means super funds are gambling with your proceeds by placing it in the share market as a lump sum. Most people want to access this money soon after a successful claim. If you similarly want access to your money then any daily change in the share market could cost you thousands. Especially during the economic downturn in which we are currently experiencing.
At Splatt Lawyers, we’ll fight for you. We will ensure you get paid in a desired and timely manner. Our service works on a no-win, no-fee basis to ensure you are treated fairly throughout your TPD claim. We have successfully resolved over 99% of our client’s disputes over our 28 years of operation without a need to go to court. Give us a call today on 1800 700 125
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