Superannuation and insurance claims – don’t assume anything!

When you are discussing your superannuation and insurance entitlements with your superannuation and insurance funds always make sure you clearly understand the meaning of each particular word used in the contract.

This may seem like an overkill at the time, it is important as all insurance claims and contracts are very particular and outline their terms and conditions of the contract in great detail. It is essential that you understand from the start what your expectations and rights are in particular circumstances where you are a third party.

To shed light on some of the meaning of these terms in your superannuation and insurance contract, there is a ‘definition’ section which aims to translate some of the meaning of these words into plain English. This ‘definition’ section is more often than not, longer than the actual superannuation and insurance claim or contract itself.

Superannuation insurance is considered an event based insurance, meaning that the coverage is based on when your injury such as total and permanent disablement (TPD), temporary disablement (TTD), terminal illness or death happened. For example if you are claiming for a total and permanent disablement (TPD) the date you stop working is considered the ‘date of disablement’ which may signal the start of the 6 months waiting period you need to satisfy before you can be considered totally and permanently disabled.

The date you ‘cease work’ is often used to determine what type of insurance coverage you have attached to your superannuation account and how much money you will be entitled to receive if you become injured or ill to the extent that you can no longer work without significant retraining.

The date you ‘cease work’ will often be defined in your insurance policy as the date you stopped being able to perform all or some of your ‘important duties’. However the date you ‘ceased work’ could still be a time where you attended work but perhaps were performing special light duties. ‘Important duties’ will also be defined and may be something like ‘duties that take up 20% or more of the occupational tasks’.

Certainly, one usual meaning of ‘ceasing work’ would be that you aren’t doing any work at all. The date that you stopped doing any work at all may be different to the date you ‘cease work’ and the two dates may correlate to being eligible to two different insurance amounts or insurance types.

Ultimately, if the superannuation fund or insurer advises you that you are or have not been covered at a particular date, ask them why and get it in writing. Do not forget that even though you don’t pay these insurance premiums out of your bank account every month, you are still paying them in the long run out of your superannuation account. If you have been paying premiums, but you are still not covered it is important you know and understand why not, so you are not denied to claim on the basis of a miscommunication and misunderstanding.