What to do if your TPD or income protection claim has been rejected

There are many reasons why a disability insurance claim like income protection or a total and permanent disablement (TPD) claim might be rejected or declined.

Your claim may have been rejected simply because insufficient information or supporting evidence was provided with your initial claim documentation, or for TPD claims, for example, you may not have met the definition of TPD. Whatever the reason, there are options to appeal a rejected income protection or TPD claim.

Know the terms of your insurance policy

It pays to understand the basis upon which your income protection or TPD claim was declined. Each insurance policy will have its own definitions that need to be satisfied in order to receive an insurance benefit, and many of these definitions interlink with each other.

In our experience, it is important to obtain a copy of the full policy document, not merely rely on extracts inserted into an insurer’s reasons for declining your claim.

Some common reasons for income protection and TPD claims being rejected include that:

• the claimant did not meet the policy definition of disability for their specific claim type;
• the claimant did not have the support of their doctor(s);
• the policy was not active at the time of injury or illness;
• the claim was lodged with insufficient supporting evidence.

Three options to review a decision to reject an income protection or TPD claim

Step 1 – internal review with the insurer

You should always seek to have a rejected income protection or TPD claim reviewed by the insurer through their internal review or complaints process. When the insurer sends notification of your claim being denied, they are also required to provide you with information on how and where to request a review of the decision they have made.

At this very important stage you should make sure that you clearly set out why you feel the decision to reject your claim was wrong and provide supporting evidence to substantiate those reasons. Insurers don’t always get it right the first time, and there is no cost to you to seek an internal review.

The review or complaint process is handled by someone different to the original decision-maker, and they quite often sit within a separate department within the insurer. A review of a decision should also be handled relatively quickly in comparison to the length of time that it may have taken for them to originally decline your claim.

This is relevant for all types of insurance claims, not just income protection claims or total and permanent disablement claims against disability insurance cover held within a super fund.

Step 2 – external review to AFCA

If the internal review process is not successful, the next step could be to submit a complaint through the Australian Financial Complaint Authority (AFCA).

According to AFCA’s website, it is a:

“… non-government ombudsman service providing free, fair and independent help with financial disputes. It is a one-stop-shop for consumers and small businesses who have a dispute with their financial firm, over things such as banking, credit, insurance, advice, investments or superannuation. Where an agreement cannot be reached between parties, AFCA can issue decisions that are binding on financial firms.”

AFCA has different rules and time limits depending on whether your complaint relates to an insurance claim through a super fund or directly with an insurer. Due to the strict time limits, we recommend you make your complaint as soon as possible after receiving the decision of the internal review process.

AFCA’s dispute resolution process is designed to be quick, cheap and simple, utilising the guiding principle of ‘fairness’.

There is no application fee, and no costs can be awarded against you as the person bringing the complaint.

Your complaint can be resolved by AFCA in a number of ways including payment of an amount of money, but limits or caps apply. As they are not a court, legal principles guide the likely outcome, but they also take into account industry codes and guidelines, good industry practice and previous relevant decisions to decide what is fair in all the circumstances.

Step 3 – take your matter through the court system

If the internal review process fails and your complaint to AFCA does not deliver the payout you are seeking, you can issue court proceedings. It should be noted, however, that unlike the internal review process and the AFCA process (which are both free to pursue), court proceedings can be very costly, time-consuming and stressful.

Get help from an experienced disability insurance adviser

At Hall Payne Lawyers, we assist with a range of disability insurance claims, including TPD, income protection and trauma insurance. We can help you understand the reasons your claim was rejected so you can make an informed decision on whether to review the decision with our assistance.

If you haven’t yet commenced your claim, having someone on your side who understands the claims process, as well as the insurer’s obligations and the legal terminology, is often the difference between having your claim accepted or rejected by the insurer in the first instance.

If your disability insurance claim has been denied, is taking too long, or you have any other concerns in relation to TPD, income protection, trauma insurance or death benefits, get in touch with a member of our superannuation and insurance team.

Contacting Hall Payne Lawyers

You can contact us by phone or email to arrange your consultation; either face-to-face at one of our offices, by telephone or by videoconference consultation.

Phone: 1800 659 114
Email: general@hallpayne.com.au

Further reading about disability insurance claims

• Can I return to work after a successful TPD claim?
• Can I claim TPD and income protection at the same time?
• Insurance options inside superannuation