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Surge in Disputes Over TPD and Disability Insurance Claims

Understanding the Increase in Life Insurance Claim Disputes

Surge in Disputes Over TPD and Disability Insurance Claims?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Recent data from the Australian Prudential Regulation Authority (APRA) reveals a notable rise in disputes related to Total and Permanent Disability (TPD) and disability income insurance (DII) claims.
In the 12 months ending December 2025, life insurance claims for regulated funds totalled 117,219, a slight decrease from the previous year.
However, the number of disputed claims increased by 13.7%, reaching 11,207 compared to 9,851 in the prior period.

TPD and DII claims accounted for 88% of all disputes, highlighting ongoing challenges within the industry, particularly concerning the management and assessment of disability-related claims. The data also indicates that 56% of these disputes were related to group insurance within superannuation, while 33% involved individuals who received advice.

The rise in disputes may be attributed to several factors, including the increasing complexity of claims, particularly those related to mental health conditions. A study by the Council of Australian Life Insurers (CALI) found that mental health was the leading cause of TPD claims, comprising nearly one in three claims paid. The $2.2 billion paid in retail mental health claims in 2024 nearly doubled the amount recorded five years prior.

For consumers, these statistics underscore the importance of thoroughly understanding policy terms and conditions, especially concerning disability coverage. It's advisable to maintain clear communication with insurers and seek professional advice when navigating the claims process. Additionally, staying informed about industry developments and potential reforms can help policyholders make informed decisions about their coverage.

Published:Wednesday, 3rd Jun 2026
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

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Knowledgebase
Occupational Hazard:
A risk associated with the nature of a particular occupation, which may affect insurance premiums.