Life insurance and TPD claims

What is total and permanent disability cover?

Total and Permanent Disability (TPD) insurance pays a lump sum if you become totally and permanently disabled and are unlikely to ever work again in your own occupation, or in any occupation depending on the definition in your policy. Many terminal illness diagnoses qualify for a TPD claim even while the person is still alive, still working part-time, or still mobile.

TPD cover is often held inside superannuation (as an automatic inclusion with most super funds) as well as through separately held life insurance policies. Many people do not realise they have TPD cover through their super fund because it is included automatically and they have never needed to think about it.

Contact your superannuation fund and ask directly: "Do I have TPD cover?" If you do, ask for the policy document and the claims process. Do not assume that because you have not been told about it, you are not covered.

What is the terminal illness benefit under life insurance?

Most Australian life insurance policies include a terminal illness benefit that allows you to receive your life insurance payout before you die, rather than having it paid to your estate or beneficiaries after your death. This is sometimes called an "advancement" of the death benefit.

To access this, the policy typically requires a medical certificate confirming that you have a terminal illness and are likely to die within 12 or 24 months (the timeframe varies by insurer). Your treating specialist and GP can provide this certification.

Accessing the terminal illness benefit now, rather than as a death benefit later, can provide significant financial relief. The money is available for medical costs, to pay off debts, to fund travel or experiences, or simply to reduce financial stress. It also means you have control over how the money is used rather than leaving it entirely to your estate.

Contact your insurer and ask specifically about terminal illness benefit claims. Ask what certification they require, what the timeframe for processing is, and whether a financial adviser or claims advocate can assist with the application.

How do I make a claim?

Start by locating all insurance policies: life insurance, income protection, TPD, trauma or critical illness cover, and any cover held inside superannuation. If you cannot find policy documents, contact your insurer or super fund directly and ask for a copy of your current coverage summary.

For each policy, call the insurer and tell them you have a terminal illness and want to understand your claim options. Ask specifically about: terminal illness benefit, TPD claims, trauma or critical illness cover (which may pay a lump sum on diagnosis of certain conditions), and any other relevant benefits.

Each claim will require medical evidence. Your treating specialist will typically need to complete a form provided by the insurer. Bring the insurer's form to your next specialist appointment so it can be completed in one visit.

Keep copies of everything submitted. Ask for written confirmation of receipt. Ask what the processing timeframe is and follow up if you have not heard back within that period.

How should I think about using the funds?

Before accessing insurance funds, consider speaking with a financial adviser who has experience in estate planning. How the money is structured, whether it flows into a testamentary trust or directly to beneficiaries, and how it interacts with Centrelink entitlements and the estate can all affect the outcome for your family.

This does not need to delay the claim. You can apply and receive the funds and seek advice about their use in parallel. The priority is getting the claim in motion.

What if my life insurance is held inside superannuation?

Many Australians have life insurance and TPD cover included automatically within their superannuation fund, often without actively selecting it. This cover is worth checking immediately after a diagnosis.

Log in to your superannuation account or call your fund and ask: "What insurance cover do I have?" The fund will tell you whether you have life, TPD, or income protection cover, and what the sum insured is for each. The claims process for insurance through super is slightly different to a standalone policy, but your fund will explain the process.

If you have multiple super accounts, check each one. Many people have accumulated accounts from different employers over the years and may have insurance in accounts they have lost track of. The ATO's myGov service (ato.gov.au) can show you all superannuation accounts held in your name, including any insurance attached to them.

What can I do if my claim is denied?

Insurance claims for terminal illness can sometimes be disputed by insurers over the definition of TPD, the qualifying period, or the medical evidence. If your claim is denied, do not accept this as final.

Ask the insurer for the specific reasons for the denial in writing. Request an internal review. If the internal review does not resolve the dispute, you can escalate to the Australian Financial Complaints Authority (AFCA) at afca.org.au, which is a free, independent service for resolving insurance disputes.

Insurance claims advocates and specialist insurance lawyers can also assist with disputed claims. Many operate on a no-win no-fee basis for life and TPD claims.