The words in a letter from an insurer about total and permanent disability (TPD) or income protection

These are contract terms, not statutory tests. The policy document or the product disclosure statement governs what each phrase means in a particular case. What the Life Insurance Code of Practice does is set standards for how the insurer behaves while it decides. So each entry below says what the Code requires, and points you back to the policy for the definition itself.

Each phrase below gives three things: what it means in plain English, where it is defined so you can read the source yourself, and what it does not decide. That last line is the one that matters most, because most of the damage these letters do comes from reading a decision about one thing as a decision about everything.

This page describes published rules. It does not say anything about your claim. Nothing here means you have, or do not have, an entitlement. Only the scheme, an insurer or a court decides that, and a lawyer can tell you how the rules apply to your situation.

15 phrases, decoded

"declined"

In plain EnglishThe insurer's decision not to pay the claim, under this policy, on the evidence it has.

Where it is definedLife Insurance Code of Practice (March 2025) cl 5.51: "We will make a decision on your claim by admitting, declining or closing your claim." cl 5.58 requires the insurer to tell the claimant in writing its reasons and a summary of the information relied on; where a pre-existing condition is the reason, an explanation of the medical connection; that copies of the documents relied on can be requested and will be sent within 10 Business Days; that the claimant can ask for the decision to be reviewed or provide more information; and the complaints process. cl 5.57: if a claim is closed or declined the claimant can ask for it to be reopened or reassessed, and if the insurer agrees there is a new Claim Received Date and the Code timeframes restart.

What this does not decideIt is not a finding that the person is not disabled, and it does not decide a claim under any other policy, or under any other definition inside the same policy. It is also not the end of the process, and the letter itself is required to say so.

"closing your claim"

In plain EnglishAn administrative outcome, usually about information the insurer says it did not receive. It is not the same thing as a decline.

Where it is definedLife Insurance Code of Practice (March 2025) cll 5.51 and 5.56. Before closing a claim because outstanding information has not been received, the insurer "will follow up with the person we are waiting for at least twice using different methods of communication" where available.

What this does not decideIt is not a decision on the merits of the claim. It is reopenable under cl 5.57, and reopening restarts the Code timeframes.

"Show Cause letter" and "Procedural Fairness letter"

In plain EnglishPre-decision letters. They set out a preliminary view and invite a response before anything is decided.

Where it is definedLife Insurance Code of Practice (March 2025) definitions: a Procedural Fairness letter is "A letter where we write to you with our preliminary view on your claim and which gives you an opportunity to respond before we make a decision." A Show Cause letter is "A letter we will send you before we make a decision to vary or avoid your cover, that gives you an opportunity to respond." cl 5.52: the insurer will say how long the claimant has to respond and "will give you a reasonable period of time to respond".

What this does not decideNothing. It is not a decision, which is exactly why it is the letter most often mistaken for one. It is the point at which new information still changes the outcome without a formal dispute, the same role that Comcare's notification of an intention to make a determination plays in that scheme.

"own occupation"

In plain EnglishA policy definition that turns on whether you can work again in the job you were doing before.

Where it is definedASIC Moneysmart, TPD insurance: "you're unable to work again in the job you were working in before your disability. This cover is more expensive and is usually only available outside super." Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 4.07D(2): a trustee "must not provide an insured benefit in relation to a member of the fund unless the insured event is consistent with a condition of release specified in item 102, 102A, 103 or 109 of Schedule 1". reg 4.07D(3) preserves benefits for members who joined before 1 July 2014.

What this does not decideThe label on a policy summary does not decide which definition applies to a particular member. Members who joined a fund before 1 July 2014 may still hold grandfathered cover, so the label has to be read against the actual policy and the join date.

"any occupation"

In plain EnglishA policy definition that turns on whether you can ever work again in any job suited to your education, training or experience.

Where it is definedASIC Moneysmart, TPD insurance: "you're unable to ever work again in any job suited to your education, training or experience. This cover is cheaper but has a higher threshold to claim, so it's less likely to pay out." Its statutory cousin is SIS Regulations 1994 reg 1.03C, under which a member is taken to be suffering permanent incapacity if the trustee "is reasonably satisfied that the member's ill-health (whether physical or mental) makes it unlikely that the member will engage in gainful employment for which the member is reasonably qualified by education, training or experience."

What this does not decideThis is the most misread point in the whole decoder. The policy definition and the superannuation condition of release are two separate tests decided by two separate parties. The insurer decides the policy definition. The trustee separately decides permanent incapacity for release of the benefit under reg 1.03C. It is possible for one to be satisfied and not the other.

"activities of daily living"

In plain EnglishA policy definition based on basic self-care tasks rather than work.

Where it is definedASIC Moneysmart, TPD insurance: "you're permanently unable to perform some basic self-care tasks, such as bathing, feeding dressing toileting and mobility, without assistance. This cover has the highest threshold to claim."

What this does not decideIt says nothing about capacity for work. This definition often applies to people who were not working, or were working limited hours, when they became unwell, so a decline under it is not a finding about whether the person could hold a job.

"waiting period"

In plain EnglishThe time you have to wait, under the policy, before income protection payments start.

Where it is definedASIC Moneysmart, Income protection insurance: "This is the amount of time you must wait before your payments start. Most income protection policies offer a waiting period between 14 days and two years. You must be unable to work as a result of your illness or injury at the end of the waiting period to be eligible for payments." Life Insurance Code of Practice cl 5.5(b) requires the insurer to tell the claimant about "your cover and any waiting periods that may apply" within 10 Business Days of the Claim Received Date.

What this does not decideIt is not a processing delay and it is not the insurer being slow. It is a condition of the policy, and it is also the point the Code decision timeframes run from under cll 5.48 and 5.49.

"benefit period", and the definition switch

In plain EnglishHow long monthly payments can run, and the separate point at which the test you are assessed under can change.

Where it is definedASIC Moneysmart, Income protection insurance: the benefit period is "how long you'll keep getting the monthly payments if you remain unable to work ... Most income protection policies offer two or five years, or up to a specific age (such as 65)." Life Insurance Code of Practice cl 5.8: if a benefit period for income-related payments is expiring, the insurer will tell the claimant at least 3 months before the last payment is due. cl 5.9: "If there is a change in the definition under which you will be assessed after a stated period of time, we will also give you at least 3 months' notice", and offer to start the reassessment early "so your income is not disrupted if you are still eligible."

What this does not decideA payment stopping at this point is not necessarily a decision that health has changed. Many income protection policies change from an own occupation style test to a broader test after a set period, most commonly two years. The Code requires three months' warning of that change, which is why cl 5.9 is worth looking for in the file.

"offset"

In plain EnglishAn amount subtracted from the monthly benefit because of other income the person receives, commonly workers compensation weekly payments or another insurer's payments, and in some policies certain social security payments. Which categories apply is set by the policy.

Where it is definedLife Insurance Code of Practice (March 2025) cl 5.10: the insurer will give at least 3 months' notice if the insured benefit is going to reduce, "except for where offsets or partial payments reduce your benefits". There is no regulator definition of "offset". The offsets that apply to any given policy are in the policy document, so we do not publish a list.

What this does not decideAn offset reducing a payment to nil is not a decline. Cover remains on foot. It is also expressly carved out of the 3 month notice rule in cl 5.10, so it can happen without warning.

"surveillance"

In plain EnglishCode definition: "When an investigator watches or films your activities in public."

Where it is definedLife Insurance Code of Practice (March 2025) cll 5.40 to 5.43. The insurer will try to resolve apparent inconsistencies without using surveillance (cl 5.40), and if it cannot, must document them and have a senior team member review and approve (cl 5.41). Surveillance must not continue longer than 4 months (cl 5.42(h)), and must not happen in a court or judicial facility, a medical or health facility, a bathroom, changing or lactation room, business premises not open to the public, or inside your home (cl 5.43(a)). cl 5.43(e): the insurer must require the investigator to stop if it receives evidence from a doctor, psychologist or other appropriate person that surveillance is negatively affecting the claimant's health, including mental health, and that evidence "will not be used by us against you in the evaluation of your claim".

What this does not decideNothing. It is evidence gathering, not a decision. The stop rule in cl 5.43(e) is the least known sentence in this part of the Code.

"an examination the insurer arranged"

In plain EnglishAn appointment with a doctor the insurer chose and paid, to give an opinion for the file.

Where it is definedLife Insurance Code of Practice (March 2025) cll 5.18 to 5.23. The insurer will tell the claimant they can ask for a list of doctors to choose from, and where practical will include at least one doctor of each gender on it (cl 5.18). The insurer pays for the appointment, any reports, and reasonable travel and out of pocket costs agreed in advance, which may include a family member or support person where agreed (cl 5.21). It "will avoid asking for more than one" such examination "from the same type of specialist within 6 months, where possible", and if it does, it will explain why (cl 5.22). The report is to be provided within 20 Business Days after the request or the appointment, the claimant can ask for a copy, and if that timeframe is missed the insurer must say so and keep the claimant updated (cl 5.23).

What this does not decideIt is an opinion for the file, not a decision. The examining doctor is not treating the claimant and does not decide the claim.

"interview"

In plain EnglishA meeting the insurer arranges to ask the claimant questions. The Code sets conditions on how it is run.

Where it is definedLife Insurance Code of Practice (March 2025) cll 5.24 to 5.39. Reasons must be documented and a senior team member must approve before it proceeds (cl 5.24). Interviews are to take no more than 90 minutes unless the claimant agrees in writing (cl 5.32), with a 5 minute break at least every 30 minutes and the right to ask for more or to end it early (cl 5.33). The claimant can ask to be interviewed somewhere other than their home unless a home interview is essential, in which case the insurer must explain why (cl 5.29). A key information sheet must be provided beforehand covering the right to a representative or support person, the right to decline audio recording, and how to complain (cl 5.30). The interviewer must not allege fraud without the insurer's prior authority (cl 5.34), and must end the interview if it becomes clear a support person or interpreter is needed and is not present (cl 5.35).

What this does not decideNothing. It is information gathering. The rights in cll 5.29 to 5.35 exist whether or not the letter arranging the interview mentions them.

"Claim Received Date"

In plain EnglishThe date the Code timeframes start running from.

Where it is definedLife Insurance Code of Practice (March 2025) definitions: "The date a life insurer records it has received the first piece of information, but not necessarily all information, to allow it to commence the assessment of a claim." From that date or the end of the waiting period, whichever is later, the insurer is to decide an income-related benefit within 2 months (cl 5.48) and a lump sum benefit within 6 months (cl 5.49). Once all information is in, the decision must be communicated in writing within 15 Business Days (cl 5.50). Progress updates are due at least every 20 Business Days (cl 5.6), and a response to a request for information within 10 Business Days (cl 5.7).

What this does not decideIt does not decide anything about the claim. It is a clock start. It matters because everything else in the Code is measured from it, and because a reopened claim gets a new one under cl 5.57.

"Circumstances Beyond Our Control"

In plain EnglishA defined Code term that pauses the insurer's decision timeframes.

Where it is definedLife Insurance Code of Practice (March 2025). The definition lists eight situations, including outstanding reports not yet received or assessed, the claimant not responding in a reasonable timeframe, ongoing rehabilitation, retraining or treatment, a suspected non-disclosure or misrepresentation, and a suspicion of fraud. cl 5.59: where these apply the insurer has not breached the Code, but it must tell the claimant in writing what they are before the 2 or 6 month point, update every 20 Business Days, and explain the complaints process. cl 5.60: if they are likely to continue beyond 12 months, the claim must be referred to a senior team member or review committee, with the outcome given in writing.

What this does not decideIt is not a decision and it is not an open-ended pause. It turns a missed deadline into a compliant delay, and in exchange it triggers a written explanation naming the reason, updates every 20 Business Days, and a senior review at 12 months.

"final response" and the complaints clocks

In plain EnglishThe insurer's written answer to a complaint, and the trigger for going outside the insurer.

Where it is definedLife Insurance Code of Practice (March 2025) cl 7.2: acknowledgement within 24 hours or one Business Day, or as soon as practicable. cl 7.13: a final written response within 30 calendar days, including the action taken or the reasons, a summary of the information relied on, an acknowledgement that documents relied on can be requested, and an acknowledgement of the right to go to an external dispute resolution body "along with how to contact them and any time limit for doing so". cl 7.17: where the policy is owned by a superannuation fund trustee, the trustee must give a final written response within 45 calendar days. cl 7.7: on a complaint about a declined claim or the value of a claim, the final decision must be to reopen or reassess, to maintain the original decision, or to overturn it.

What this does not decideThe insurer's final response is not the end. It is the trigger for the external body. On the time limit for taking a superannuation disability complaint further, we do not publish a number: our last check could not confirm one from the source. Code cl 7.13(d) requires the final response to state the time limit, so the deadline is in the letter itself.

Where this fits

• My insurance claim was declined. What now?
• How to find out what cover you hold, free, in one phone call
• The Letter Decoder: all five senders

Every phrase, section number and quotation on this page was checked against the sources linked above on 14 August 2026. If something has changed since, tell us and we will fix it: contact.