In the last 6 years, there is a disturbing trend creeping into Total and Permanent Disability (TPD) insurance benefits of imposing a much tougher ‘Activities of Daily Living’ (ADL) test.

ADLs means you can’t do 2 or more basic tasks such as bathing, dressing, feeding, toileting or getting in and out of bed.

It is much harder to qualify than a standard TPD definition which is the incapacity to do your normal job or other suitable work given your education, training or experience.

A recent ASIC report 696 shows some promising steps.

Read our Media Release for the full details.

Media Release August 2021

Most insurers have provided options to their trustee clients for changing the ADL definition in group policies.


There is a trend to broaden the eligibility criteria to assess consumers under an ‘any’ or ‘own’ occupation definition, rather than an ADL or ‘activities of daily working’ (ADW) definition, which should help lead to fewer consumers being funnelled into restrictive definitions.


Some of Australia’s largest insurers are removing or modifying ADL definitions for insurance in superannuation.


In their reviews, insurers prioritised group policies, where there is greater potential for poor consumer outcomes, as most TPD cover is provided through superannuation to fund members by default and without financial advice.


The most prevalent restrictive definition is ADL, with eight insurers using this restrictive definition in the group distribution channel and eight insurers using this restrictive definition in the retail distribution channel.


Most insurers have shown a willingness to explore alternative TPD definitions in the group distribution channel to improve consumer outcomes.