Navigating a Total and Permanent Disability (TPD) insurance claim is never easy. For self-employed Australians, however, the path to a successful claim is often paved with even more complexities. With unique business structures, inconsistent income, and often limited access to employer-sponsored superannuation, self-employed individuals face challenges not typically encountered by salaried workers.
This blog highlights the common hurdles and offers practical strategies to help self-employed individuals navigate the TPD claims process successfully.
What Is a TPD Insurance Claim?
A TPD insurance claim allows individuals who are permanently unable to work due to injury or illness to access a lump-sum payment through their superannuation fund or standalone insurance policy. It can provide vital financial support during a life-altering situation.
For self-employed Australians, TPD insurance may be held within a retail (individually purchased) insurance policy, a superannuation fund (industry or retail), or both. Identifying where the cover is held is an essential first step in lodging a valid claim.
Why TPD Claims Are More Complex for Self-Employed Australians
1. Inconsistent or Irregular Income
Unlike salaried employees, the self-employed often experience fluctuating income streams. This variability can make it difficult to:
- Demonstrate earnings capacity pre-disability
- Estimate lost earning potential
- Prove the financial impact of the disability
Insurers may challenge the consistency and reliability of income documentation, placing the burden of proof on the claimant.
2. Undefined Job Role and Occupational Scope
A self-employed person might wear multiple hats: operations, marketing, administration, and delivery. In a TPD claim, the definition of ‘occupation’ is crucial, as many policies assess disability based on one’s usual occupation at the time of injury or illness.
Demonstrating which tasks were core to your role is essential to meeting policy definitions, such as:
- Own Occupation – Inability to perform duties specific to your business or trade.
- Any Occupation – Inability to work in any occupation reasonably suited to your training, education, or experience.
Without a well-defined job role, insurers may argue that alternative duties could still be performed.
3. Insufficient Medical or Vocational Evidence
Some self-employed individuals delay seeking medical attention or ignore symptoms due to work obligations. This delay may result in:
- Insufficient medical documentation
- Lack of contemporaneous records
- Disputes over the timeline of disability onset
An insurer may use these gaps to deny or delay a claim.
4. Limited Superannuation Contributions
Many self-employed Australians are not legally required to make regular superannuation contributions. As a result, they may have:
- No default TPD insurance within super
- Lower coverage amounts
- Lapsed or forgotten policies
Without adequate cover, a valid claim may not result in a meaningful payout.
Strategies to Overcome TPD Claim Challenges for the Self-Employed
1. Maintain Detailed Business and Financial Records
Accurate and up-to-date records are essential, including:
- Profit and loss statements
- Business activity statements (BAS)
- Tax returns
- Payroll summaries (if employing staff)
This documentation helps support income history and demonstrates how the disability has impaired your ability to work and generate income.
2. Clear Definition of Occupational Duties
Clearly outlining your day-to-day tasks, either through job descriptions, business plans, or affidavits, can strengthen a claim. Consider:
- Breaking down your activities by hours per week
- Detailing physical vs. administrative responsibilities
- Highlighting core tasks that can no longer be performed
This detail supports whether you meet the “own occupation” or “any occupation” test within your policy.
3. Independent Medical Reports
Insurers will often request their own medical assessments, which may not always reflect your lived reality. It is critical to obtain:
- Engage independent specialists with expertise in your condition
- Request detailed reports from your treating doctors
- Undertake Functional Capacity Evaluations (FCEs) where necessary
The more thorough the medical evidence, the harder it becomes for insurers to dispute the claim.
4. Identify All TPD Policies Held
Many Australians are unaware they may hold multiple TPD insurance policies across:
- Current and former superannuation accounts
- Inddividually purchased policies
- Industry funds
Do a thorough policy audit to ensure all available avenues for compensation are explored.
Common Mistakes Self-Employed Claimants Should Avoid
- Failing to disclose pre-existing conditions that may affect the validity of the policy.
- Delaying claim and missing time-sensitive deadlines, which may breach policy deadlines.
- Underestimating the documentation required to prove both disability and business impact.
- Handling the claim alone, without seeking legal support, often leading to denied or delayed payouts.
How We Help at JI Solicitors & Associates
We specialise in TPD claims for self-employed Australians, and our tailored approach includes:
- Analysing the fine print of your policy
- Assisting with the collation of financial and medical evidence
- Engaging independent medical experts
- Communicating with insurers on your behalf
- Pursuing appeals where claims are unfairly denied
Our experienced TPD lawyers work closely with accountants, doctors, and financial advisors to build a well-supported and strategic claim from the outset.
Final Thoughts: Don’t Face TPD Claims Alone
The TPD claims process is complicated for any individual, but the self-employed face particularly steep hurdles. From vague job definitions to inconsistent income proof, these obstacles can make a legitimate claim feel impossible.
But with the right legal support, the path forward becomes much clearer.
If you’re self-employed and struggling with a TPD claim, call 02 8896 6046 to book a consultation with JI Solicitors & Associates. Let us help secure the outcome you deserve.
