TPD Sustainability – What Advisers Say

The adviser community appears to have real doubts about the sustainability of the TPD products currently offered in the Australian market.

As we go to press more than six in 10 (61%) of respondents to our latest poll agreed with the premise that the TPD products offered today “…are no longer fit for purpose.”

However just under one third of those responding (31%) disagree, while the rest are unsure.

In raising this important topic last week we noted that with the industry having recently undergone an Income Protection Insurance transformation (imposed on the sector by APRA’s regulatory intervention), it now appears to be directing its focus to the sustainability of TPD products.

We posed our poll question ahead of a Riskinfo TPD Round Table on the topic, to be released soon, where our discussions in relation to the future sustainability and fit-for-purpose nature of TPD products included:

• Demograhic changes and the make-up of the work-force in 2023 compared to 1960s Australia, when TPD was first introduced
• Defining ‘permanency’ in an era of medical advancements
• Affordability
• The rise in the incidence of mental health issues and therefore mental health claims
• The emergence of ‘return to work’ and rehabilitation programs
• The seeming conflict between meeting a TPD definition and returning to wellness

To ensure this important discussion continues, we’ll be progressively releasing a TPD Round Table video series over the coming weeks and sharing the views and conclusions reached by our diverse panel of industry stakeholders including advisers, licensees, life companies, reinsurers, associations and other stakeholders.

Editor’s Note: Since this story was published Riskinfo has released Part 1 and Part 2 of the Zurich TPD Round Table video series referred to above. Click here to view Part 1 and here for the second discussion in the series.