Takeover terms in your TPD insurance cover

Have you ever been told that you are not eligible for TPD insurance cover yet your superannuation statements have listed an insurance benefit? Most group life insurers who provide total and permanent disablement (TPD) or income protection insurance through your superannuation fund are signatories and bound by the takeover terms created by the Financial Services Council (see guidance note 11 at http://www.fsc.org.au/standards-guidance/financial-services-council-guidance-notes.aspx).

These terms, amongst other provisions, provide that where a new insurer takes over coverage, the new insurer must honour previous coverage which you have had the benefit of.

Quite often when a new insurer takes over the insurance arrangements they will have a new eligibility criteria which you may not meet at the time of the takeover.

Provided you held some form of coverage immediately prior to the takeover you are still able to access that level of coverage even if your disability occurs after the takeover.

Quite often these issues are overlooked and when asking a superfund whether you are covered or not they will commonly only look at the current coverage and if you do not meet the eligibility criteria for that coverage they will tell you that are not covered.  The reality can be very different and you may in fact be covered by the terms existing immediately prior to the new insurance arrangements.

It is important that if you are told that you are not covered because of a lack of eligibility under the new policy that you check when that policy commenced and what your coverage was immediately prior to the new policy.

An example of this is where someone who was not employed at the time of the takeover of the insurance is not eligible for default TPD cover.under the new arrangements.  If before the new arrangements they did have TPD cover then the new insurer must honour at least the level of the prior cover.

It pays to check the fine print and get expert advice if you are told that you are not eligible to claim in these circumstances.

How can Super Claims Australia help you?

If you had a claim rejected or if you are unsure of what you can do in your situation, give Super Claims Australia a call on 1800 088 677 or via our online contact form for an obligation free consultation.