Interpreting Total and Permanent Disablement in HCF Life Insurance Company Pty Ltd v Kelly Case: Factors to Consider for Life Insurance Claims
In the case of HCF Life Insurance Company Pty Ltd v Kelly [2002] WASCA 264, the insured was injured at work as a miner and lodged a T&PD claim against the insurer.
The policy described total and permanent disablement as:
Total and permanent disablement which has lasted for at least 12 months and completely prevents and is likely to completely prevent for the rest of the life of the person disabled from engaging in any occupation for which he is fitted by reason of his education, training or experience.
The Full Court held that the definition could not be limited in its interpretation of “any occupation” to “an occupation [the insured] had habitually performed”.
Wallwork J did however confirm the decision in Beverley v Tyndall Life Insurance Co Ltd (1999) 21 WAR 327 that the insured bears the onus to establish that he met the relevant definition of total and permanent disablement in the policy.
In this case, there was medical evidence that despite his injury, the insured had residual capacity to work in clerical positions. After reviewing various medical and psychiatric evidence, the Court overturned the decision of the lower Court and concluded that the insurer had exercised its discretionary judgment fairly and reasonably in determining that the insured did not meet the definition of total and permanent disablement. Some factors which the Court identified in supporting its conclusion were:
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the insured was still a very young man (he was 32 at the time of the injury) – and to conclude that he is unlikely to be employed in “any occupation for which he is fitted for the rest of his life” was, in the view of the Court, “to undervalue his ability and his attitude”;
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his physical condition was good even though it was noted that he might require further treatment; and
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without the presence of certain psychiatric problems, the Court believed that the insured could undertake many occupations.
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This decision provides guidance to life insurance claims areas in relation to the factors which they may properly consider in determining a T&PD claim for younger insureds.
