Australians claiming on total and permanent disability (TPD) cover face a much tougher road than families claiming on a death policy, according to new life insurance data from the Australian Prudential Regulation Authority covering the year to 30 June 2026.
Death claims were almost always paid, with 97% accepted on advised policies and 98% on cover held through super. TPD acceptance was noticeably lower at 81% for advised policies and 88% for group cover in super. Income protection sat in between, at 94% and 96%.
The main reason TPD claims fail is the fine print. Not meeting the policy’s definitions or eligibility rules accounted for 80% of rejected advised TPD claims and 91% of rejected TPD claims through super funds.
Waiting times are also long. Three in four death claims were settled within a fortnight, but only 23% of TPD claims were, and the average TPD claim took an estimated 3.9 months to finalise. Income protection and TPD also produced the most disputes, though most disputes were eventually resolved, usually within 45 days.
What it means for your money
Many Australians hold TPD cover through their super without ever reading it. Look up your fund’s policy now and check how it defines total and permanent disability, for example whether it applies to your own occupation or any job you could reasonably do. Knowing the definition and the evidence you will need before you claim can save months of delay, and if cover through super does not fit your situation, it may be worth getting advice on a stand-alone policy.
Source: Money Magazine