How long does a TPD claim take?
Navigating a Total and Permanent Disability (TPD) claim can be a daunting task. One of the most common questions we are asked is, how long does a TPD claim take?
In this blog, we will explore the factors influencing the timeline of a TPD claim and provide insights into what to expect through the process.
Understanding TPD Claims
TPD insurance provides cover for individuals who suffer from conditions that prevent them from engaging in gainful employment. These conditions may include severe injuries, chronic illnesses, or disabilities that render individuals unable to perform their current occupation (own occupation definition) or any other occupation for which they are suited by education, training, or experience (any occupation definition).
A successful TPD claim can offer significant financial relief, repaying debt, medical costs, rehab costs, and living expenses for individuals who are no longer able to work. However, navigating the TPD claim process requires a thorough understanding of the policy terms, as well as patience due to the potentially lengthy process.
Factors Influencing TPD Claim Duration
1) Nature and Complexity of the Claim
The Complexity of the claim can significantly impact the timeline. Claims involving clearly defined disabilities may be processed more quickly, while those requiring further medical documentation or assessment may take longer. For example, if the disability is straightforward, such as a complete and permanent loss of a limb resulting in an inability to work, the claim may proceed relatively quickly because the condition is clear within the definition of TPD.
However, more complex cases, such as mental health conditions, chronic pain, or progressive conditions may require extensive medical evaluation and specialist opinions. This could lead to delays if the insurer seeks clarification or additional information.
2) Documentation
Gathering medical records, assessments from healthcare professionals, employment history, and other relevant documentation may delay the claim process. It’s important to ensure that all documents are ready and accurate before submitting a claim. Missing or incomplete documents are a common reason for delays.
In some cases, the insurer may request additional documents after the initial submission, which can extend the processing time. For example, they may ask for follow up medical reports, further evidence of ongoing treatment, or updated statements from the treating doctor.
3) Insurance Company Procedures
Each insurance company follows its own procedures for assessing and processing TPD claims. Some companies have streamlined processes and adequate resources to manage claims promptly, while others may have more hurdles to navigate, impacting the timeline accordingly. Internal review processes may vary. Some insurers might have a quicker internal decision-making system, while others may require multiple layers of approval before a claim is finalised. This can further impact how long it takes to receive a decision.
4) Super Owned Policies
If the TPD policy is linked to a superannuation fund, the claim process may take longer compared to a stand alone policy. Super funds may require their own internal reviews in addition to the insurer’s assessment. This means that after the insurer has made a decision, the super fund’s trustee may need to approve the release of the funds. This additional step adds to the timeframe.
TPD Claim Process
Whilst each insurer may have its own process, generally the TPD claim process will include the following steps:
1) Understand the Policy
It’s important to review the insurance policy to understand the terms, conditions, and cover provided. TPD policies can differ significantly in their definition and criteria. Understanding these definitions and any exclusions or limitations on the policy is crucial for preparing for a successful claim.
2) Notify the Insurer or Adviser on the Policy
Once the policy has been reviewed, notifying the insurer or the adviser of the policy of the intention to claim is the next step. The insurer will then provide a claim pack, which will detail the documents they require for assessment of the claim. Prompt notification can help expedite the process, as insurers will often start preparing for the claim as soon as they are informed.
3) Complete the Claim Pack and Gather Documents
The claim pack will include several sections regarding the details of the life insured and medical condition. As part of completing the documents, the insurer may require medical documents or medical consent to be signed to allow the insurer to speak directly to the treating doctor and/or clinic. It’s important to ensure that all forms are completed accurately and that all requested documentation is provided in full.
4) Assessment of Claim
The insurer will assign the claim to a claims assessor or team to review. The assessment can include a review of medical history, medical condition, supporting documents, and occupation details. The insurer will determine whether you meet the criteria for total and permanent disability as defined in their policy.
During the assessment phase, the insurer may request additional information such as an independent medical report or to obtain a report through their own preferred medical provider. While necessary, these assessments can introduce further delays, especially if there are waiting periods to see specialists or obtain reports.
5) Decision and Outcome
After completing the assessment process, the insurer will communicate their decision regarding the TPD claim. If the claim is denied, the insurer will provide reasons for their decision and may provide options for appeal.
It’s important to note that the insured has the right to dispute and seek a review of the decision. This can be done through an internal dispute resolution with the insurer or through external bodies such as the Australian Financial Complaints Authority (AFCA). However, this process can add months or longer to the claim timeframe, depending on the complexity of the dispute.
The government tracks and releases data relating to the results of claims for various insurance types. For the period of 1 July 2022 to 30 June 2023, the average claim time for a TPD claim through a superannuation fund was 4.9 months.
While this provides a useful benchmark, it’s important to remember that past claim history is not an exact measure of future claims. Each claim is assessed individually, and timeframes may still vary from the average as outlined above.
This data can be located on the moneysmart website and was sighted in May 2024. The data is subject to future changes.
Seeking Assistance with Your TPD Claim
If you are considering making a claim, are in the process of a claim, or are disputing a claim, seeking professional advice can help. At Unified Wealth, we can help you navigate the complexities of TPD claims, ensuring you are well supported throughout the process.
Speak to our team today and take the first step toward securing the financial support you need during this challenging time.
At Unified Wealth our team are highly experienced and provide goal-based advice and solutions for a range of advice strategies.