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Tpd legal query

Discussion in 'Superannuation, SMSF & Personal Insurance' started by MAT55, 17th Nov, 2011.

  1. MAT55

    MAT55 New Member

    Joined:
    17th Nov, 2011
    Posts:
    2
    Location:
    Melbourne
    Hi

    New to forum and hoping someone can offer some advice. My wife has a not worked for the last two years and has been diagnosed with a serious psychological disorder.

    1. She has held a Life & TPD policy through her industry super fund for over 20 continuous years, and the level of TPD cover automatically quadrupled just 4 weeks after her last day at work. One lawyer I spoke to said that normally you would have to have been working at the time, in this case at least another month, to make a claim for the higher amount. It seems unfair especially since her fund is still calculating her insurance premiums on the higher cover amount. The difference in payout is substantial and means we can just payout our mortgage and have one less financial worry.

    2. With psych disorders how can a doctor really determine if the condition is permanent? What is the legal definition of "permanent" for psychological disability? The lawyer I spoke to told me not to be concerned about this because psychological disorders treated differently but cannot afford to spend legal fees on zero result. I've heard even "no win no fee" arrangements can run up big $$$ in disbursements, and cannot take any financial risks.

    3. What happens to TPD payouts if the person recovers to some degree say 5 years of therapy later? Are they allowed to earn an income again, even on a part time or casual basis?
     
  2. jorgon

    jorgon Active Member

    Joined:
    28th May, 2011
    Posts:
    25
    Location:
    Brisbane
    Dear MAT55

    Sorry to hear about your troubles.

    Normally you would find the answer to all three of your questions in the fine print of the insurance policy itself. You need to get a copy of this from the fund and go through it very carefully.

    After that process, if there are still any ambiguities or unclear areas, assume for the purposes of your claim that they are resolved in your wife's favour. In other words when making the claim set it at its highest in so far as it may be consistent with the terms of the policy and is reasonably arguable.

    If the insurers start arguing about the level of the claim, then you may need to seek legal help at that point unless the insurers are obviously correct.
     
  3. MAT55

    MAT55 New Member

    Joined:
    17th Nov, 2011
    Posts:
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    Location:
    Melbourne
    Thanks for your reply Jorgon

    I've looked at the Member PDS (fund has nothing else to provide me), and it does not cover points 1 & 3. The Tax Office was able to answer my third query with yes of course we want to collect tax again and would welcome someone recovering to any level where they can re-enter the workforce. This also goes for retirees accessing their super and deciding it was not enough to live on and re-enter the workforce.

    The level of cover is the most difficult query to answer since even the fund cannot provide more than lodge a claim and the insurer will decide answer.
    My wife did get a letter from her fund one month before her last day at work which states that members who are not actively employed on the day the increase was to take effect would only be entitled to a limited cover for any increased portion of TPD cover until they are again actively employed.
    Do I interpret that as she is entitled to part of the increased amount? I know the fund has been deducting the higher premiums since the amount was increased, so is it really black and white or would it depend on the argument of a really good lawyer?
     
  4. jorgon

    jorgon Active Member

    Joined:
    28th May, 2011
    Posts:
    25
    Location:
    Brisbane
    Dear MAT55

    Sorry but I don't think you can get a definitive answer on this public forum because it is completely unsafe to rely on "what usually happens", which is all that the members of the forum can say.

    The legal position in your case is governed by the policy concerned, which is specific to your case. Also the correspondence would seem to throw some light on the matter. If you are unsure about the position and need to know, then these documents will have to be inspected by somebody who can give you advice about them. I would be surprised if the answers to your questions are not in the policy/PDS.

    But could I ask, is there anything stopping you claiming at the higher level and then seeing what the insurers say? This is the most pressing matter, the other things could probably be dealt with afterwards.