A New South Wales court held that the requirement in a life cover document that the insurer “believes, after consideration of medical and any other evidence, that you are incapacitated to such extent that you are unlikely ever to be able to work again in your occupation” had to be satisfied before the total permanent disability claim was to be met. In the period between the end of the waiting period and the insurer’s incapacity decision there occurred a policy anniversary which increased the cover by $107 064.80 which the court found the insured was entitled to receive.
The construction of the policy was such that a claim under the own occupation temporary disability cover required the establishment of the following:

  1. That the plaintiff had suffered a sickness or injury while working in regular employment for income;
  2. That the plaintiff had, for at least three continuous months, been absent from work and unable to work because of that sickness or injury;
  3. That medical evidence clearly indicated that the plaintiff will be unable to work for a period of at least six consecutive months;
  4. That the defendant believed that the plaintiff is incapacitated to such an extent that he is unlikely ever to be able to work again in his own occupation.
    The 44 year old insured was a chiropractor who suffered degenerative osteoarthritis leaving him unable to continue his work. The insurer made the incapacity decision in May 2023 after the policy anniversary date in January 2023 which increased the sum insured.
    The court found that the series of requirements to be met were conjunctive. There was no basis for construing any one of these conjunctive requirements as being subordinated to the others. Each requirement had to be satisfied before the total permanent disability claim was to be met, and it was not until that time that the sum insured would be determined. It was therefore determined on the basis of the increased cover amount.
    On these facts and wording the same result would follow in South Africa.
    [Tassell v TAL Life Limited [2024] NSW DC 301]