TPD a higher hurdle to pass

Graeme Edwards

An inquiry by the Australian Securities and Investments Commission (ASIC) has found that some Australian life insurance companies were declining up to 37 per cent of total and permanent disability claims.

Insurance companies said the situation was different in New Zealand.

Graeme Edwards, of AIA, said 96% of his company’s claims had been accepted so far this year, although more TPD claims were declined than some other types of policies. The rate of decline could run to 10% to 15% at most, he said.

“We do see lower volumes of total and permanent disability (TPD) claims and the decline rate for TPD can be higher as the definition is a high test to meet. Essentially the client will need to prove they neither can, nor ever will be, able to work in their own or any occupation, depending on which they chose for their policy,” Edwards said.