In an Australian insurance market first, Macquarie Life has upgraded their FutureWise TPD Insurance options and launched a new style of TPD Insurance. Named ‘Extended Activities of Daily Living,’ Macquarie’s new TPD Insurance product follows products offered overseas and is offered to all current FutureWise Life Insurance policies and new policies offered.
TPD Insurance offered in Australia is a disability based style of insurance, where claims are based against a person’s inability to ever conduct an occupation again. This claims assessment style, particularly for Any Occupation TPD Insurance, is somewhat subjective leaving in some cases the insurer to deem if a person is able to return to work based on medical opinion. Macquarie’s Extended Activities of Daily Living TPD Insurance policy, rather than assess on a subjective disablement basis, instead assesses based on a more objective medical assessment, similar in the way that Trauma Insurance policies are assessed.
The Extended Activities of Daily Living definition of Total and Permanent Disablement has been added to current in-force Macquarie Futurewise policies giving an additional definition to claim on policies.
The Extended Activities of Daily Living TPD Insurance aligns claim payments with medical functional status assessments. Like usual TPD Insurance policies, the reduction in the ability to conduct the specific activities must be permanent in nature.
Macquarie’ Extended Activities of Daily Living TPD Insurance is assessed via the following categories in addition occupationally based disablement definition;
Macquarie’s Extended Activities of Daily Living TPD Insurance is substantially different to usual Activities of Daily Living style policies where it is stipulated a person must have lost independent existence via the inability to conduct 2 of 5 activities of daily living unassisted (i.e. bathing, eating).
The policy has two levels of TPD policies, the standard policy where full payment only is available for impairment of 4 categories and a ‘plus’ policy where partial payments are available if disability results in impairment in 2 categories (40% payment) or 3 categories (65% payment).
Some benefits of this new TPD definition include;
- Less Subjectivity – Rather than a doctor being required to provide an opinion as to a person’s suitability to return to work, which may take some time for a confident assessment; Macquarie’s new policy provides actual definitions that can be assessed against, providing more clarity for claims assessment. It may also speed claims as less opinion is required.
- Flexible Payments – The Partial Impairment Option allows partial payments for less severe disablement or advanced payments for early stages of disablement providing funds quicker. Under this option, TPD claims are likely to be paid in circumstances where traditional TPD claims would not.
The additional new definition is available under superannuation, however in order to be released from superannuation, the usual superannuation permanent disability definition applies. If the Extended Activities of Daily Living definition is specifically desired and it is the intention to hold this policy under superannuation, Macquarie offers the Superannuation Optimiser Option to structure the policy in a more flexible manner incorporating superannuation.
The Macquarie Extended Activities of Daily Living TPD is a unique TPD definition in Australia and as it is provided in addition to the usual TPD definitions, the addition of this benefit provides more value for money and more claim certainty when compared to traditional TPD products.
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About the Author – Benjamin Irons
Benjamin has been involved in the financial services industry since 2004. Benjamin has a Bachelor in Business, Diploma of Financial Services (Financial Planning). Previously a Financial Adviser and a business owner, Benjamin has worked with hundreds of individuals and businesses to implement simple strategies to improve wealth. Benjamin writes for a number of websites to assist people take control of their finances and find their financial freedom!