Don’t overlook impact of TPD, adviser urges

Total and permanent disability (TPD) cover is something that might be being underestimated by a lot of clients and their insurance advisers, says Travis Hamilton of Plan B Financial Services.

Wednesday, October 2nd 2024, 10:11AM

Hamilton said he had done “more than my share of TPD claims” through the years.

They were all clients who had “own occupation” cover, so the claims were paid when they were unable to continue to work in their current fields, rather than “any occupation” cover, which requires people not to be able to work at all.

“None would have been claimed under ‘any’,” he said. “Own occupation is the way to go.

“I think – my personal opinion – is that the name TPD can create a misconception around what’s eligible for a claim. All these clients were still working. They weren’t permanently disabled but met the definition for the payout.”

In one case, a stonemason could not lift his arm beyond horizontal because of a shoulder injury.

He was still an active worker but was able to claim on his policy.

Another was a gibber who would work all week but because of his back pain would then be bedridden for the weekend to be able to work again from Monday.

“The specialist said that’s ‘no way to live your life’ and the provider agreed and paid the claim. When I spoke to him a few years down the track he was still gibbing but at a completely reduced capacity so he could manage it on his own terms, which was a good outcome.”

In another case, a woman claimed TPD for post-traumatic stress disorder (PTSD) she suffered after working in the banking sector during a robbery. She was working as a fit, active caterer, he said, but was still able to claim.

“The provider experience, for those that haven’t dealt with much TPD, was that they were really good to deal with,” he said.

“One was a bank but the rest were main five providers. It was a bit of a process for a few of them, it takes a bit of time, but that’s due to the nature of defining disability.

“Providers do a really good job in assisting those claims, they’re there to pay claims – it’s good to experience that rather than just hear it.”

He said advisers often recommended TPD the least and people would often remove it from the potential options offered to keep cover affordable.

“It does fall off more than most but it arguably has the biggest impact on someone. I’m a big fan of it for those reasons.”

Hamilton said he had also dealt with a number of trauma, life and terminal illness claims.

“The thing with terminal illness is as an adviser, it’s really important to get those claims paid as soon as possible.

“One of them was someone in their early 30s with a young family who was terminally ill with bowel cancer. He was able to use that money to spend quality time with family and travel around the country and overseas, making lots of memories, and leave behind what he wanted.

“He had been told previously by someone else he wouldn’t be able to claim until he passed away which is obviously not correct. Getting terminal illness paid as soon as possible is obviously not rocket science but is one of the most important thins you can do as an adviser for that reason.”

Hamilton said he also sees a number of mental health claims. Thirteen years ago, when he first became an adviser, there were more that related to depression, he said. Since then, it had moved to anxiety and stress.

He said advisers usually wanted to be there for the client at claim time. “Especially when you’re talking complex medical or lump sum benefits or disability claims.”

Adviser could offer peace of mind and reassurance, navigating the process and liaising between the client, insurance provider and any other relevant parties, he said, to make sure the client was informed. “That personal contact can’t’ be outsourced to AI.”
Hamilton said it could sometimes be tricky for advisers to balance the need to inform the client with the need to not set unrealistic expectations.

Even when things looked like they should be straightforward, he said, it was important not to set the client up to expect an instant resolution.

“Even if it looks black and white… I’ve had ones that have gone well outside the timeframe of what you would expect a claim to be assessed in. It’s been my shortcoming on a couple of them, I’ve learned that giving clients a sort of expected timeframe is not always helpful, even though they’re really pushing for it or want to know the claim is covered…

“Being careful around that so when it doesn’t meet the timeframe – even though the ultimate outcome is an accepted claim – an extended timeframe can mean anxiety, stress for the client and extra work.

“Every case is very different and it’s not overpromising an outcome - this will be paid, this will be a breeze – all those things you can let slip out but should hold back on.”

Getting claims experience was a key part of being an adviser, he said.

“Trying to put your hand up to take on claims even if it’s not a policy you put in place yourself, if you know you need that experience. Especially for new advisers, it can take them a while to do their first claim - that’s when it’s really full circle.”

Hamilton said claims could be rewarding and sad at the same time.

“It gives you better conversations with future clients if they’re asking about the claims process and you’re familiar with different types of claims you’ve done.”

Hamilton said it could sometimes be a thankless job. “You can get a really good outcome for someone going through the toughest time in their life but it could be a blur for them, especially if it’s a recent diagnosis or a death claim.

“They’re not going to be doing google reviews or advocating on your behalf. The people who have actually received a claim – a lot aren’t’ in a position to be able to say how lucky I am whereas the people who haven’t been exposed to a claim or knowing someone who has, you’re trying to convince them that insurers pay claims. But they’re not the ones going through it.”

He said that made sharing stories, respecting clients’ confidentiality, important, so that people could hear about the good that insurance could do.

“The more stories we share the better we can articulate the value to clients and to people we want to refer us business.”

Tags: insurance