Published: 31 March 2016
Author: Stringer Clark

CommInsure scandal: is your disability claim at risk?

The exposé of CommInsure’s dubious practices in denying compensation insurance policy payouts to legitimately ill clients highlights the need for caution in making a claim against your superannuation fund.

Claims against what is commonly referred to as temporary or permanent disability compensation are very much at risk if care isn’t exercised making sure your illness or disability is properly described so that it meets the often out of date medical definitions contained in many policies.

Media reports detail examples of people who have suffered severe heart attacks who have nevertheless had claims for compensation rejected by the Commonwealth Bank’s insurance arm.

In many cases, insurance companies are resorting to outdated medical definitions in order to reject the claims of legitimate sufferers.

The scandal has become a real problem for the superannuation industry whose policies usually come packaged with insurance policies that promise substantial financial payouts to members who can no longer work due to severe illness or injury. These payouts can amount to many thousands of dollars and are critical in offering financial support for people unable to continue in the workforce.

Insurance industry abuses systemic

Industry Super Australia chief executive David Whitely believes the problems are not restricted to CommInsure, and that insurers are trying to contain costs by denying legitimate claims because of the commission driven nature of the industry. 

Allegations have even been made that CommInsure claim mangers leaned on doctors to have them change their medical opinions.

What should you do if making a TPD claim?

In practical terms, what should you do?

While the systemic problems need to be tackled by better legislation and regulation of the insurance industry, people who require financial support now need practical advice on how to maximize the chance of making a claim that will be approved.

If you’ve suffered an illness or an injury that prevents you from returning from full time or even part time work, and you are a member of a Super scheme, it’s likely you will also be covered by an insurance policy packaged with that scheme that will compensate you financially.

Remember, these claims can be made even though you haven’t been hurt or become ill at work. They cover all illness or injury that prevents you from working. 

The trick is that you must ensure that the description of your illness or disability conforms to the definitions contained within your Super policy.

Here is a simple checklist for TPD claims

1. Call your Super scheme and ask them for information about any insurance policies you are covered by.
2. If you are covered by disability or income protection insurance, ask for a copy of the claim forms. (These are usually located on line.)
3. Make an appointment to see your superannuation lawyer.
4. Bring all relevant medical reports and copy of your resume to the meeting with your lawyer.
5. Let your GP know that you are making a claim and that they may need to complete the claim forms for you.

Carefully filling out a claim form can often mean the difference between success or rejection.

It’s a lot more difficult to contest a rejected claim, than to get it right in the first place.