When did you last check the insurance in your superannuation?
If you’re like me (and yes, you’d think I would know better), you tend to just let your super do it’s own thing. We know we shouldn’t, the professionals tell us we shouldn’t, but sometimes these things are just too complicated.
Whenever my super fund sends me something by old fashioned snail mail, I generally tend to take notice. Emails are easy to ignore, but if someone has bothered to actually mail me something, I take that to mean that it’s probably important.
Take the other day for instance, I received a rather large, thick envelope from my super fund. I opened it to be met with their glossy brochure advising me of my insurance changes. As insurance claims are my thing, I will take an interest in anything that is likely to affect my clients or myself. And affect it will.
For those unaware, TPD insurance is usually (but not always depending on various factors) found within your super fund. TPD stands for “Total and Permanent Disability” and covers you usually (depending on the specific policy definition) if you are unable to return to work in an occupation you are skilled, trained and experienced in. I have made many claims under these policies for clients over the years and they all have their own particular quirks however what I read in the change of definition of my own fund shocked me.
My fund/its insurer has decided to introduce a new part to the definition, and that is, if you are not working due to a mental health condition and unable to work due to a mental health condition, you MUST be assessed by a relevant health practitioner with a PIRS assessment of 19%.
So, what does that mean?
PIRS is an acronym that stands for Psychiatric Impairment Rating Scale. It is a tool used in psychiatric assessments to evaluate the severity of psychiatric injury or illness and the degree of functional impairment it causes.
The PIRS rating system was developed to provide a standardized way of assessing and quantifying the impact of psychiatric illness or injury on a person’s daily functioning. The scale ranges from 0 to 4, with higher scores indicating more severe impairment.
The PIRS rating can be used to determine the severity of an individual’s psychiatric illness or injury, which can then be used to guide treatment decisions and determine the level of compensation or disability benefits they may be entitled to. It’s important to note that the PIRS rating is just one tool used in psychiatric assessments and should be used in conjunction with other diagnostic tools, clinical judgment, and the individual’s subjective experience of their symptoms and functioning.
The fact is, that a 19% PIRS rating is extremely high. In my whole personal injuries career, I can count on one hand how many 19%’s and above I have seen in my clients. I can also tell you that I have had countless clients with assessments of around the 5% mark completely debilitated and not able to return to work.
The problem with thresholds is that it attempts to categorise and fit the square pegs into a round hole which is completely unfair in a compensation/claim system, and especially in a time where mental health is in the spotlight. For those suffering mental health conditions, support is needed, not deterrents from recovery.
What do you need to do?
Take some time to review your super accounts and your insurance. Take an interest in not only the performance of your account and your fund (your friendly financial advisor can assist with this) but also look at the definitions, if you’re not happy or satisfied that the default cover is likely going to be right for you, look at what changes you can make – and of course, chat to a professional when it comes to financial advice and the best insurance options for you.
If you have any queries regarding TPD claims, please contact our office.