Every day, hard-working Australians contribute to their superannuation fund in the hopes they will have a source of income at retirement and access to Total Permanent Disability (TDP) insurance should they need it. Unfortunately, thousands of Australians who have been left unable to work due to injury or illness are discovering just how difficult it can be to access their hard-earned insurance benefits due to unfair tactics used by TPD insurers.
What is a TPD payout from a superannuation fund?
A TPD claim entitles you to payment of a lump sum if you have suffered an injury or illness that leaves you unable to return to work in the same capacity.
This payment can fund your current and future medical costs, clear any debts you may have accrued, and provides you with a lump sum to help restore your quality of life as much as possible.
Delay, deny and defend: The tactics used by insurers
Too many Australians needing financial assistance and medical treatment are having to battle with their insurers to access the TPD insurance benefits they are entitled to, while insurers seem to do all they can to delay claims, deny access to TPD benefits or offer inadequate TPD payment amounts.
Our team of superannuation and insurance claims lawyers hear all too often that these tactics can make the claims experience traumatic – clients have commented that it feels like insurers just don’t care about their suffering and are only focused on making a profit.
Common ways insurers delay the claims process include:
- Regularly changing their criteria to make claiming for insurance benefits harder;
- Constant requests for different information;
- Insisting they haven’t received documents that have been sent;
- Transferring cases to new staff members so investigations have to restart;
- Sending the claimant to multiple medical practitioners (also known as ‘doctor shopping’) to seek evidence that will support a decline of a claim; and
- Not answering calls or putting claimants on hold for long periods of time.
These hurdles created by insurance companies are so exhausting, genuine claims are frequently abandoned by those desperately needing support.
For those claimants that finally do get a response to their claim, it may be either a very small offer or the claim is rejected because the illness or injury doesn’t match the exact wording on the policy. In some cases, policies even use out-dated medical definitions which are then used to deny valid claims.
Other tactics insurers have been reported to use to deny claims include:
- 'Cherry picking’ from medical and other evidence to support declining a claim; and
- Offering employee performance bonuses based on declines of claims.
Far too often we see insurance companies operating on a ‘take it or litigate it’ basis, where they offer unrealistic or no payment amounts to individuals who can no longer work and need ongoing medical treatment. This seems to be that in the hopes the claim gets dropped, or that the claimant accepts the unfair offer rather than starting the legal process to fight for a better outcome.
The report into Australian life insurance
In late 2016, the Australian Securities and Investments Commission (ASIC) released a report summarising its findings of a review into the life insurance sector.
The ASIC report revealed that that the most poorly performing insurer (in terms of claim denials) was rejecting 37% of claims. Appallingly but not surprising, the ASIC report also indicated that some insurance operators were offering staff bonuses based on their decline rate.
Royal Commission into misconduct in the superannuation industry
Following the ASIC’s report, a Royal Commission was undertaken to investigate these poor industry practices. In 2019 the Final Report for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry was released. This included a number of findings and recommendations to eliminate common issues within the industry and make the insurance claims process fairer for Australians.
Our experience is that unfortunately, insurers seem to have learned nothing from these investigations and reports, and still continue to do all in their power to delay, deny and defend insurance claims.
Shine Lawyers – we’re here to help
If you're struggling to access your superannuation or TPD benefits, help is available. At Shine Lawyers, our superannuation and disability claims lawyers are experts at going up against insurance companies to help our clients access their full entitlements and benefits. Contact us today for an obligation-free consultation where we will evaluate your circumstances to provide you with clear and tailored advice on your claim.
Written by Shine Lawyers. Last modified: October 8, 2020.