Advisers Cautioned on TPD Claims Strategy

Claims specialists speaking at the recent Entireti Risk Summit Roadshow events cautioned advisers that rushing to lodge TPD claims quickly can create significant litigation risk, client dissatisfaction, and costly delays.

In a panel discussion led by Aaron Zol, Entireti’s Head of Business & Insurance Growth, Trevor Battersby, Founder of TPD Claim Support, and veteran claims consultant Col Fullagar, Principal of Integrity Resolutions, said advisers need to adopt a far more strategic approach to submitting TPD claims on behalf of clients.

Battersby said one of the biggest problems he sees is the tendency to “submit and hope”, where claims are lodged before medical evidence, occupational definitions, and permanency requirements have been properly assessed.

According to Battersby, advisers and clients often underestimate how quickly frustration escalates once a claim is submitted, followed by apparent radio silence.

“At the six-month mark, if you’re not getting traction, there’s definitely something not working,” he said.

We’re looking at how to future forecast everything required to put the claim in…

“At the 12-month mark we see a significant spike where clients get fed up and start hearing from family, friends or legal firms telling them to get a lawyer.”

Battersby said the industry was seeing identifiable “trigger points” where claims increasingly move toward litigation, particularly after 12 to 18 months of delays.

He argued that many of those disputes could be avoided through stronger upfront preparation and pre-assessment work before a claim is formally lodged.

He outlined an 11-step pre-assessment process used by his team, including:

• Eligibility testing
• Review of original applications
• Occupational analysis
• Social media reviews
• Medical evidence assessment
• Policy definition analysis

“We’re looking at how to future forecast everything required to put the claim in a box with a ribbon on it to avoid those long delays,” said Battersby.

One major issue, he added, was confusion between diagnosis and permanency.

“A lot of claimants think, ‘I’ve been diagnosed, I want my claim’,” said Battersby. “But diagnosis is not a permanency test.”

He said many claims are lodged before specialists have confirmed a claimant is unlikely to return to work, leading to procedural fairness disputes and extended delays.

Mental health

Mental health claims were highlighted as a particular problem area. Battersby said many clients initially see psychologists under mental health treatment plans, but TPD definitions often require supporting evidence from a psychiatrist.

“It is amazing how many times we see that,” he said.

The panel also discussed how occupational definitions can unintentionally undermine claims.

As a financial adviser there’s a requirement in claims support to have competence…

Battersby described cases where claimants undertook retraining or new study programs while waiting for claims to be assessed, only to create new “skills and experience” arguments insurers could later rely upon.

He warned advisers that poor communication and lack of client coaching during the claims process often created openings for litigation firms and complaints specialists regardless of whether you charged a fee or submitted at no cost.  Immaterial.

“As a financial adviser there’s a requirement in claims support to have competence and maintain confidence as well as utilise a diligent documented claims and process,” said Battersby.

“The minute you submit, as a financial adviser the client will assume they’re going to get paid. A documented eligibility check is critical in managing expectations or addressing red flags before a submission.”

Look for problems

Fullagar said advisers and claims specialists needed to approach TPD claims by actively searching for potential weaknesses before submission.

“To be honest, I look for as many problems as possible,” he said.

He described reviewing policy definitions, benefit limits, disclosure issues, occupational duties, and income structures before any claim is lodged.

In one example, he identified a potential exposure involving two TPD policies worth a combined $12m, where the insurer had a market maximum benefit limit of $10m.

“Had both claims been lodged simultaneously, the adviser could have faced immediate litigation exposure,” said Fullagar.

…don’t answer the questions on the claim form if the question isn’t worded correctly…

He recommended a “highly structured process” for making claims, including carefully reviewing claimant declarations and ensuring medical evidence aligns with client statements before submission.

“You don’t answer the questions on the claim form if the question isn’t worded correctly,” he said. “You give the insurance company the information they need rather than answering the question they ask. Change the question if you have to – it’s only a form.”

He also stressed the importance of synchronising to ensure consistency between claimant and doctor statements before forms are submitted. If any inconsistencies are found, the correct position should be identified and an explanation provided.

“It’s very easy to change your statement,” he said. “But it’s much more difficult to change the doctor’s. Get the fact base first (i.e. the doctor’s statement) and ensure consistency in the submission.”

Fullagar argued that advisers should not automatically panic when errors occur, including cases involving lost insurance cover.

“Simply because you might have made a mistake doesn’t mean someone else hasn’t also made a mistake,” he said.

He urged advisers to investigate insurer processes, lapse procedures and historical underwriting issues before conceding liability.

The panel also discussed the growing role of specialist claims consultants, with Battersby arguing many disputes escalated unnecessarily because claims moved too quickly into formal legal channels instead of being reworked and resubmitted.

Key takeaways

1. Avoid “submit and hope” TPD claims strategies
2. Pack, formalise an eligibility checklist and document the conversation where you’ve addressed any components that don’t confirm the eligibility
3. The importance of collating medical evidence and research with the relevant PDS is critical prior to a submission
4. If in doubt scope out and seek professional advice
5. Treat TPD claims as a structured advice process, not an administrative exercise
6. Separate diagnosis from permanency when assessing claim readiness
7. Pay close attention to occupational definitions, retraining and post-disability work activity
8. Review original applications and disclosure history before submission
9. Align claimant statements and medical evidence before lodgement
10. Be especially careful with mental health claims where psychiatrist evidence may be required