Generally, you are not expected to work after a TPD payout however there is generally no recourse for the insurer if you are able to resume employment after the payment of your TPD claim.
The requirements to successfully claim on a TPD policy varies significantly between policies
Most policies will contain a ‘total and permanent disablement’ clause which defines TPD as when, as a result of an injury or sickness:
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You are not able to perform at least one of the important duties of your regular occupation; or
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You are not able to perform at least one of the important duties of any occupation for which you are reasonably suited by education, training or experience; and
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Your incapacity is likely to be permanent.
Despite this, it is unlikely your TPD payout is going to prevent you from ever returning to any form of work and you should go through your policy information carefully to determine this.
Going back to work after tpd payout?
It is possible to go back to work after receiving a TPD payout, although the insurance company may require you to disclose your earnings and may investigate to ensure that you are not working while still receiving ongoing benefits. Lump sum payments are generally unaffected by a return to work in the future.
Will I have to pay back my TPD lump sum if I return to work?
This is a difficult question to answer as it really depends on the specific policy that you have. Some policies may require that you pay back a portion of the lump sum if you return to work, while others may not. It is always best to check with the insurer to see what their policy is on this.
What does it mean when a TPD policy talks about “education, training and experience”?
Policies that use the phrases “education, training and experience” generally require that you have the skills necessary to find another job if you are unable to perform the duties of your regular occupation. This means that if your regular occupation requires a degree or other specific training, you will need to have completed that degree or training before you can make a claim. This definition is typical of ‘Any Occupation’ TPD policies.
TPD policies And “Own Occupation”
Policies that use the phrase “own occupation” generally require that you be unable to perform the duties of your regular occupation before you can make a claim. This is a more lenient definition of TPD, as it does not require you to have the skills necessary to find another job. This type of policy is typically more expensive than an “Any Occupation” policy.
What is ADL (Activities Of Daily Living)?
Activities of Daily Living is a set of criteria that applies to certain TPD policies. This criteria will generally require that, as a result of an injury or sickness, you are not able to perform at least two out of six Activities of Daily Living; or as assessed by an independent medical practitioner
The activities of daily living are:
Dressing
Feeding
Walking
Toileting
Transferring
Bathing
How Is Loss Of Limbs Defined?
The definition of loss of limbs can vary significantly between policies, but generally speaking, it will require the loss of use of both arms, both legs, or one arm and one leg.
Understanding the in’s and out’s of a TPD policy is not as simple as it sounds and the criteria to claim can vary drastically based on the policy and also your personal circumstances. Discussing your TPD Claim with an expert can spare you this burden and allow you to focus on what is most important, your health.
General Advice Disclaimer
General advice warning: The advice provided is general advice only and in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.
