MKG-newAttached to a lot of superannuation funds are insurance policies that will entitle the policyholder to a payment should they become unable to work.

Generally speaking there are either income protection policies or total & permanent disability policies.  An income protection policy entitles a person to an income whilst they are unable to work because of illness or injury.  There is usually a preclusion period and the payment will go for a finite period.

Also attached are total & permanent disability policies which provide for a lump sum to the ill policyholder.  Whether or not you are totally and permanently disabled will depend firstly on the illness and secondly on the definition of ‘total & permanent disability’.  There are two definitions for total & permanent disability policies:

  1. any occupation – if you have been unable to work as a result of illness or injury and are incapacitated to the extent that you will never work in any income earning occupation suited to your educational, training and experience; and
  2. own occupation – if you have been unable to work to such an extent that you are unlikely to engage in your own occupation.

Obviously the definition of ‘own’ as opposed to ‘any’ is a far easier definition to satisfy.  If for example your occupation is a builder and you suffer an arm injury which makes you unable to work as a builder.  It may however be that you can still undertake a sedentary job such as a lawyer, provided you have the education, training and experience and therefore you would fulfil the definition of ‘own occupation’ but not the definition of ‘any occupation’.

So in the above example you would be able to claim under the second definition but would not be able to fulfil the first definition.

To lodge a claim involves completing a great deal of paperwork as well as obtaining medical reports from treating doctors and complicated legal principals.

If we can be of assistance, please do not hesitate to contact us at Everingham Solomons because Helping You is Our Business.

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