Retirement
The three types of workers that should avoid TPD insurance
Australians in hazardous jobs, working part-time or those have have taken time out of work might be paying for junk total and permanent disability insurance, a consumer advocate group has warned.
The three types of workers that should avoid TPD insurance
Australians in hazardous jobs, working part-time or those have have taken time out of work might be paying for junk total and permanent disability insurance, a consumer advocate group has warned.

According to Super Consumers, more than 12 million Australians have TPD insurance as part of their superannuation, with many unable to claim.
The advocacy group explained that insurance providers will make members pass either a standard or activities of daily living (ADL) test, with the latter “extremely difficult to succeed in a claim”.
“In some cases, the insurance can be very useful for people who can no longer work because of illness or injury, helping them to pay their bills and go about their life with dignity. But this insurance has little value if you can’t claim on it,” Super Consumers said.
The advocacy group highlighted that super funds and insurers haven’t made it easy for you to work out if the ADL test applies to members, meaning it’s difficult for members to know if their insurance is “junk”.

One of the main ways insurers create junk insurance is through the “hazardous occupations” or “special risk” list.
“Some of the jobs listed are not commonly thought of as particularly dangerous. For example, some super funds list musicians among the hazardous occupations. More commonly, it includes occupations such as airline crew, labourers and factory workers,” Super Consumers explained.
People in part-time, casual or seasonal work often have the ADL requirement as part of their TPD insurance.
In these circumstances, members have to work a certain number of hours a week to avoid this junk insurance traps, with many funds setting the required hours at 15 a week.
Depending on the fund, being out of paid work for a period of six, 12 or 13 months may land you with a junk insurance policy.
This can also apply to people who’ve gone on parental leave or leave without pay.
People out of work have insurance that is less valuable, but they may not be paying less for it.
Finally, the superannuation advocacy group said people with pre-2014 super accounts should contact their providers as some people still have old definitions that applied to which test they will take.
About the author

About the author


Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more

Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more

Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more

Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more

Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more

Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more

Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more

Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more

Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more

Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more

Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more

Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more

Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more

Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more

Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more

Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more