Support reimagined: TAL’s new approach to TPD

Content Partnership

23 June 2026

Mental ill-health has become the defining challenge facing the life insurance industry and its customers today. As workplace and life stress continue to drive significant increases in claims, the industry has a responsibility to ensure customers receive the best possible support, whatever their journey looks like. TAL’s new TPD Support Option (TSO) has been developed in direct response to that challenge.

Traditional TPD insurance remains one of the most important forms of coverage for many Australians, providing a vital financial safety net at the most difficult moments in people’s lives. But, as the profile of claims has shifted, questions have emerged about whether the lump sum model alone is always the best fit.

For severe injuries and illness, the finality of a lump sum TPD payment reflects reality: a person’s working life is permanently and irreversibly changed. But for some conditions, particularly those related to mental ill-health, recovery is rarely straightforward and many people do recover and return to meaningful careers.

This tension was recognised in a recent speech by APRA’s executive director for Life Insurance, Jane Magill, who told the All Actuaries Summit in May that TPD was “being asked to solve an issue it was never built to address.”

“The label of TPD and Iump sum benefits do not always deliver good outcomes for individuals, particularly for claimants with episodic conditions,” Magill said. “There is a strong case for earlier intervention in a person’s disability journey, to provide support sooner and improve long-term outcomes.”

Independent research commissioned by the Council of Australian Life Insurers (CALI) and prepared by SuperFriend in May 2026 puts the scale of the challenge in sharp focus. Mental health conditions now account for 31% of TPD claims and 20% of claims for income protection.

And, over the last decade the number of Australians accessing some form of income support has grown from 6.5 million to 8.5 million, with cost reaching close to $80 billion¹. More than half of the survey respondents experienced periods of between seven and 15 months with no income¹, and less than half were able to return to work.

The explicit recommendation was CALI’s research called for a system better focussed on early intervention and recovery.

Part of TAL’s response has been to introduce TSO, an optional feature which can be selected within its existing TPD product.

While some insurers have responded with different options based on levels of severity, TAL’s TSO insurance is the only retail option of its kind in Australia and provides claimants with up to five partial payments of their TPD benefit for certain conditions.

“TSO enables us to better connect with the claimant through their claims journey, in conditions where a recovery isn’t always linear or predictable,” says Aaron Newman, General Manager of Individual Life Product at TAL.

“We know it isn’t always a straight path, so a lump sum payment isn’t always the best solution – because with the right level of support customers may be able to get back on their feet, and our goal was to reflect that in a new product.”

The design of TSO was shaped by extensive consultation with clinicians, advisers as well as those with lived experience, and a consistent theme emerged: for conditions where recovery is possible, supporting a customer through that journey can feel at odds with the structure of a traditional TPD claim.

“One of the clinicians made a great comment, that they were there to help their clients live their best life again,” says Newman.

“And yet there was this tension, almost a contradiction, in being asked to assess someone so that they could access desperately needed funds but at the same time making what was almost a final judgement on their prospects for recovery.”

Dr Nadia Clifton is a Fellow of the Royal Australian College of General Practitioners with a special interest in mental health, and a medical educator at Medcast. Dr Clifton is a member of TAL’s Mental Health Action Group, contributing expert advice and lived-experience voices to help shape an understanding of mental health trends, research and therapy.

She agrees that “recovering from mental health conditions varies completely widely from person to person to social context.”

“Often there can be a baseline, and then the person can have periods of time where there is episodic functional impact, such as depressive episodes that can last anywhere from a few weeks to many months, and then stretch out to years,” says Dr Clifton.

“So how can you label someone as permanently disabled at a point in time when recovery is not linear?

That question is at the heart of what TSO is designed to address. Customers told TAL that they saw TPD as a ‘safety net’, but that it hadn’t ‘kept up with modern Australia.’ The feedback from clinicians echoed that: the priority is always to get patients back on their feet where that’s possible.

“There then is a hefty label of being permanently disabled, which I worry about because if you’re permanently disabled you remove someone’s hope of recovery, and hope is really important in the mental health space.” says Dr Clifton.

It was that shared belief – that recovery should be considered possible – which shaped how TAL approached the design of TSO.  “Like the clinicians, the customer feedback was around getting back on their feet to live their best life,” says Newman.

“The other point from the feedback which really resonated was that customers wanted something that was optional, not a forced decision, and we have included that optionality as a key feature.”

TAL’s goal with TSO was to offer customers a different approach designed for the reality of how some conditions evolve over time.

“We are now able to support customers in their time of need with the staged payments, allowing them to focus on their recovery as it unfolds,” says Newman.

“We feel that this creates a better connection with the customers throughout their claim journey alongside their medical support.

“Each year we are re-engaging and checking in to see if things have changed, and if they are eligible for the next payment, so the claims journey is a natural connection which is in sync with their progress and their medical treatment. And in severe cases, there always remains the support of a lump sum.”

Financial advisers also play an important role in making the product accessible, and TAL has sought to create TSO as a product which advisers can work with in their existing advice structures.

“As an option available within TPD policies, TSO is adaptable and flexible,” said Newman. “We think this makes it truly relevant for modern Australia as well as being more affordable and sustainable.

For more information on how the TPD Support Option works, please visit: https://adviser.tal.com.au/products/tpd-support-option

Content Partnership sponsored by TAL 

References

1. Cross Sector Project Update: Mapping Australia’s ecosystem of income supports, SuperFriend (commissioned by the Council of Australian Life Insurers)