As recently reported in the media, former AFL star Shaun Smith has had a claim for a total and permanent disablement benefit ("TPD"), estimated to be worth approximately $1.4 million, accepted by his insurer.1 The payout is related to repeated concussions and brain injuries Mr Smith sustained while playing football.
Mr Smith, who played 109 games as a professional in the VFL/AFL, was well known for his aerial prowess and high marking. In fact, a high flying mark over teammate Garry Lyon in the goalsquare against the Brisbane Bears at the Gabba in 1995 is considered to be one of the greatest marks ever taken.
Shaun Smith's story is an important reminder to all people, not just professional footballers, to find out if they hold TPD insurance coverage because it can provide important financial support in the event of you or a loved one suddenly being unable to work.
TPD insurance is a type of life insurance which pays a specified lump sum in the event that an insured person is found to have total and permanent disability as a result of injury or illness they have incurred.
The value, eligibility criteria and evidentiary requirements differ depending on the policy held by an individual and the conditions imposed.
For example, under some policies it is the case an insured person does not have to be unfit for all work but rather cannot work in their career at the time of the accident given their education, training or experience. Under some other policies the insured person may need to be assessed as unfit for any work, not just the work they were educated and trained for.
TPD policies may also require test of an insured's ability to perform activities of daily living.
It is critical to understand the wording of the individual policy and the benefits provided under that policy before making a claim.
Many people are unaware that they may already have TPD cover which is often included in superannuation policies and/or other insurances that are commonly held. There are various ways that you may be entitled to TPD benefits, however it is most commonly through superannuation held by the insured person.
To determine whether you have TPD coverage through your superannuation, it is recommended you carefully peruse your most recent member's statement or contact your Fund.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.