A recent review by ASIC (the Australian Security and Investment Commission) has made shocking findings into the design of TPD (total permanent and disability) benefits within basic life insurance policies. For example, over 12 million Australians automatically pay for TPD through their super but in the case that the TPD is an “ADL” style of coverage, it’s been found that 60% of claims are denied.*
Imagine not only having your health permanently taken away from you, but years and years of premiums as well—now down the drain. So much for a nice big super fund to help you retire. ASIC went as far as to say that Australians were still being sold “junk policies”—yes, even by superannuation providers!
A fast and easy way to compare TPD cover on your own terms is to use the online tool at Life Insurance Comparison. A friendly team of experts can help you find cover so that you don’t have to rely on a default policy that may have been automatically set up and is sucking funds out of your super as you sleep.
Here’s How It Works:
Step 1: Select your current age below.
Step 2: Once you answer a few questions, you will have the opportunity to compare quotes from up to 9 of Australia’s largest insurers. You may also be entitled to a free consultation.
TPD cover is supposed to provide you financial protection in the case that you ever get so sick and injured that you can never work again. It’s a reality we don’t like to think about, but it’s one that can befall absolutely anyone.
So what type of TPD cover is ADL?
ADL stands for ‘activities of daily living’. This kind of policy typically only pays out in the most dramatic of circumstances, such as a permanent situation where you are unable to feed, dress or wash yourself.
If you are permanently injured or disabled enough to no longer work, an ADL policy may reject your claim on the grounds that you’re still at least able to care for yourself.
That means even if you’re one day put in a wheelchair unable to do your regular line of work, the TPD insurance in your super may still not pay you a cent! Is that a safety net you’re comfortable with?
The 60% decline rate on this narrow type of TPD insurance (ADL) is five times higher than the average declined claim rate for all other TPD claims. Other structures of TPD, however, do exist and have a much lower declined claim rate of 12%.**
These include: own occupation and any occupation, which are designed to cover you when you can no longer work in your own or any occupation at all. This is a much broader type of coverage that many people generally think of when they seek TPD insurance.
Insurance lawyer John Berrill recently explained to the Australian Financial Review (AFR):
“To be eligible for a standard TPD definition, a person needs to be permanently unfit to do their usual job or any other suitable work given their education, training or experience, perhaps with a retraining clause added.
In contrast, to satisfy an ADL definition, a person must be unable to do two or more daily living activities such as feeding, bathing, dressing, toileting, walking and transferring from bed,” he said.
Keep in mind that any TPD cover can be paid 100% through your super, although your preferred type may not be what has been set up for you when you first joined your superannuation provider.
At Life Insurance Comparison, we typically assist Australians with approval for own occupation TPD policies, and a range of other popular life insurance products. Comparing cover and understanding what your policy actually looks like is a crucial step to protecting yourself and your family for the future.
Not sure where to start? Leave it to the experts. Our service helps take the guesswork out of life insurance and can help set you up with quality cover that will pay out when it’s supposed to.
Compare now for policies that aren’t “junk.”
Get Started Now:
Step 1: Select your state below.
Step 2: After answering a few questions, you will have the opportunity to compare quotes in your area and could be eligible for significant savings.