Disabled claimants pin hopes on financial misconduct commission

Published 28 Feb 2018

Earlier this month, a landmark inquiry into wrongdoing across Australia’s financial services began, bringing new hope to total and permanent disability (TPD) claimants who feel their insurers have failed them.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry will examine misleading behaviour within the sector in an effort to restore public confidence.

According to Fairfax Media, the announcement comes as a relief for TPD claimants, some of whom have had to wait years for a decision on whether or not they will receive financial support.

How does TPD cover work?

Most Australians have life insurance through their superannuation fund or a separate insurance policy. TPD products are typically part of life cover and they pay out to people who suffer injuries or illnesses so severe that they can never return to work.

The lump sum payment can cover lost income, medical bills, out-of-pocket expenses and a range of other costs that permanently disabled individuals are likely to face in the future.

However, a Fairfax Media and Four Corners joint investigation found CommInsure regularly turns down TPD claims on the basis of outdated medical definitions.

But they are not the only insurer to leave claimants high and dry. A recent ASIC report found 16 per cent of TPD claims are rejected – more than any other type of life insurance.

The Financial Services Council introduced a code of conduct that required signatories to provide a decision on claims within six months. Nevertheless, policyholders argue these deadlines are frequently broken.

Claimants struggling to survive financially

Shani Goldsbro, 46, lodged a $175,000 TPD claim more than three years ago and is yet to receive an approval or rejection. In total, she has spent six years chasing insurer Vision Super for benefits after she became unable to work due to multiple sclerosis.

Ms Goldsbro’s catering business used to provide services to clients including Hugo Boss, but now her husband cares for her in their Hobart home, the Sydney Morning Herald reports.

“It’s like I’m numb from the head down. My thinking slows. I wilt,” she explained. “I’m trying desperately to stay well. Because I can’t afford to get ill.”

The Royal Commission is expected to provide an interim report on its findings by September 30 2018, after hearing evidence across multiple public hearings. A final report is expected on February 1 2019.

But this may seem a long way off for people who are currently awaiting essential financial support from a TPD claim. This is where expert superannuation dispute lawyers can help.

Contact Gerard Malouf & Partners Superannuation Lawyers to find out how we can resolve TPD claims issues through our no-win, no-fee service.

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