Home / Life Insurance / Life industry faces new pressure over TPD virus measures
13 July 2020
The Financial Services Council (FSC) has responded to a new pressure campaign from consumer advocates who claim life insurers are planning to reintroduce “discriminatory terms” to total and permanent disability (TPD) covers when the JobKeeper scheme ends in September.
Super Consumers Australia says about 343,000 people face financial risk if life insurers do not extend the easing of rules for making TPD claims from policyholders who have lost their jobs or are working less hours.
The temporary rules, which will end on September 27 when the JobKeeper wage support program ends, allow for policyholders with super-linked TPD covers to be assessed according to their employment status before the virus outbreak was declared a pandemic in March.
The measure means workers with super-linked TPD policies will still enjoy the same level of cover regardless of their employment status. In normal circumstances, changes to TPD covers are automatically triggered if a policyholder has a new work arrangement in place.
FSC Senior Policy Manager for Life Insurance Nick Kirwan told insuranceNEWS.com.au the life insurance industry quickly introduced two initiatives when the COVID-19 crisis started – “one for frontline healthcare workers and one for TPD claimants”.
“We haven't yet reached a view as to whether these initiatives will be needed beyond that or what that would look like, so let's not pre-judge what will be decided before we do a review.”
Super Consumers Australia claims the industry will “start discriminating” against TPD claimants who are unemployed or working reduced hours from September onwards.
“People will be falling off a financial cliff in September if discriminatory terms remain in place,” Director Xavier O’Halloran said. “We are calling on insurers to permanently waive these harmful terms once and for all.”