Acenda expands range of TPD insurance options

Australian life insurer, Acenda, has added a benefit co-designed with financial advisers to its suite of total and permanent disability (TPD) insurance options, in its effort to provide more “flexibility, clarity and choice” for members.

The new TPD Severity option expands on ‘traditional’ TPD insurance by allowing advisers and customers to mix and match the provisions of TPD Severity with other levels of TPD cover to personally cater to a wider range of individual needs.

Gerard Kerr, Chief Executive, Individual Insurance at Acenda, said the new benefit comes at the same time as TPD claims have spiked in recent years primarily due to musculoskeletal and mental health conditions, leaving TPD premiums to rise across the industry.

“TPD insurance provides Australians with valuable financial protection in the event of serious illness or injury. However, the way we work, recover and diagnose medical conditions have evolved significantly since TPD insurance was first established many decades ago and our products haven’t evolved with them,” he said.

“As an industry we need to step up and provide alternative TPD solutions to advisers and their clients to ensure they can continue to access this valuable disability cover that meets that need. We’ve worked closely with advisers to design a solution that reflects the realities of modern medicine and employment, while helping more Australians access meaningful, affordable protection.

“Acenda is taking the lead with the launch of our new TPD Severity option, which provides customers with greater options in structuring TPD cover, complementing our existing any and own offerings and bringing greater affordability to more Australians.”

According to in-house data from 2018 to 2023, there was a 166 per cent jump in the number of retail TPD claims due to musculoskeletal conditions and a 171 per cent rise in retail TPD claims for mental illness. These figures echo additional recent research released by the Council of Australian Life Insurers – which highlighted the growing concerns over surging mental health-related TPD claims – and claims data from fellow life insurer, TAL, which also found mental health as a top contributor to paid income protection (IP) and TPD claims last year.

Acenda said it has found that these conditions are more challenging to evaluate using ‘traditional’ TPD definitions and standards, given they can “vary significantly in their level of severity” and also may be “episodic” in nature. The life insurer also raised concerns over rising premiums limiting access to insurance for countless Australians, as this type of cover becomes increasingly unaffordable.

Kerr confirmed that the new TPD Severity option leverages “established medical impairment benchmarks” to help assess the level of the disability and its permanence across physical and mental conditions.

“TPD Severity provides customers and advisers with more clarity and consistency when making a claim by using established medical benchmarks to assess the severity and permanency of an injury or illness,” Kerr said.

“We will work with advisers to ensure they are supported in recommending the best options for their customers through comprehensive education and resources.

“TPD Severity is a modern solution to a modern problem, delivering customers more affordable premiums while still offering access to meaningful protection that gives Australians the confidence to take life on.”