What is Total and Permanent Disability Insurance?
TPD insurance provides a lump sum benefit if the insured person is totally and permanently disabled.
Typically, the benefit will be paid once the insured person has been absent from work for at least 6 months. TPD insurance is quite often offered as linked cover with term life insurance. When TPD insurance is taken out with term life insurance, the TPD sum insured cannot exceed the term life sum insured.
TPD insurance can also be taken out as stand alone cover.
The definition of TPD varies between insurance providers. Generally, insurance providers will use two different definitions to establish if a person is totally and permanently disabled. TPD insurance can be taken out to cover the person if they are never expected to return to work in either:
their own occupation, or
Own occupation: The ‘own occupation’ TPD definition covers the insured person if they are incapacitated to the extent that they are never expected to work again in their usual occupation. Example: A surgeon who loses their hand may be considered totally and permanently disabled under the ‘own occupation’ definition because they can never again work as a surgeon. This is regardless of whether or not they may be able to work in another occupation.
Any occupation: The ‘any occupation’ TPD definition generally covers the insured person if they are incapacitated and they are never expected to return to work in any occupation which they have education, training or experience in. With either definition, the insurance provider will usually require documented evidence from medical professionals to prove that the insured person is totally and permanently disabled.
A TPD insurance benefit could be used to:
pay for disability related costs including rehabilitation
pay for changes to the insured person’s lifestyle, for example, modifying their home
enable the insured person’s partner to reduce their hours to look after them or get a carer
provide an income to the insured person and their dependants, and
allow the insured person to pay off any debts including their mortgage.
According to research conducted by General Reinsurance Life of Australia, the chance of suffering an illness or injury between the age of 35 and 65 that will lead to total and permanent disability is about one in ten.
Most people understand that accidents can occur to everyday people going about their everyday business, however, most people believe that it will not happen to them. The important thing to understand is that it can happen to anyone at anytime and, depending on the severity, it could prevent you from ever working again.
Am I eligible for Total and Permanent Disability Insurance?
Applications for this type of insurance are usually accepted by the insurer for people between age 16 and 60, with the policy continuing until age 65.
How are my premiums calculated and what affects the premium I will pay?
Premiums for TPD insurance are affected by factors such as age, health, smoking habits, hazardous activities and occupation. Upon making a claim the insurance provider may also wish to have you examined by their own private medical professionals to ensure that your claim is valid.
How do I get a quote?
At Two Mile Bay we have access to 12 different insurers.
Total and Permanent Disability Insurance
Total and Permanent Disablement Insurance provides a lump sum if you are unable to perform the ususal duties of your own occupation or any occupation for which you are reasonably qualified by education training and experience (dependant upon contract chosen).