Published 19 Dec 2014
Insurers across Australia are paying out more than ever before for total and permanent disability (TPD) claims and death benefits, new figures have suggested.
The Australian Prudential Regulation Authority (APRA) showed life insurance policies were forced to pay holders $450 million for group TPD and death claims, as well as a further $250 million in individual disability cases.
According to The Australian, the biggest losses were incurred via industry funds, which had offered such policies at extremely cheap premiums until recently.
Since then, some TPD and death premiums have risen by as much as 100 per cent, with APRA acknowledging the rise is sharp but necessary considering the increase in successful claims.
Employees who suffer an injury or illness that prevent them from ever entering the workplace again can pursue a TPD claim, which may result in a lump sum payment and the early release of superannuation funds.
The disability does not have to be work related or a physical ailment. For example, suffering mental health problems such as post-traumatic stress disorder could make an individual eligible for compensation.
Other potential illnesses include chronic fatigue syndrome, cancer or heart attacks. Even in cases where a TPD claim is unsuccessful, the individual may still receive an advance on their accumulated superannuation.
Claims on the rise
The APRA figures revealed TPD claims are on the rise, as more people become aware of their eligibility for compensation while suffering conditions such as depression.
This has resulted in insurers putting aside more money for potential payouts, known in the sector as 'incurred but not reported' reserves or IBNR. As such, providers have seen their profits eroded from such products.
Australian Bureau of Statistics figures show approximately 1.8 million people in the country have reported a mental illness, with more than 40 per cent of these saying it is classed as a disability.
If you feel you are eligible to make a TPD claim, contacting a superannuation disputes lawyer will enable you to see whether or not your case has a high chance of success.
With so many illnesses and injuries covered under insurance and superannuation policies, individuals could secure much-needed financial support while they are off work.
No-win, no-fees lawyers can offer free guidance on the best steps to take, as well as helping you to build a case. This ensures you can make a claim without worrying over legal fees should you be unsuccessful.