Total and Permanent Disablement (TPD) insurance is basically your financial support in case of serious injury or permanent disability as a result of an accident. TPD insurance aims to give you choices and options if you become incapable to work. It provides you or your family with a one-off payment to fund lifestyle changes, covers the cost of long-term care or medical expenses, pays off your bills, outstanding debts, loans, and mortgages as well as covering ongoing income for your family.
Total and permanent disability (TPD) insurance provides cover if you are totally and permanently disabled. Your insurer will define TPD as either when you:
- You can’t work again in any occupation, or
- You can’t work in your usual occupation
TPD insurance helps cover the costs of rehabilitation, debt repayments and the future cost of living.
Each insurer has a different definition of whats considered to be totally and permanently disabled. Being off work for a year is NOT permanently disabled. Ask lots of questions so you know exactly what you’re getting.
Be cautious of advertisements offering disability cover with no medical checks. This type of cover can be very limiting – that’s why it is cheap.
TPD Insurance is normally underwritten on application and factors such as medical history, family history, past times and unusual occupational risk factors can result in a policy being offered on with exclusions or an increased premium. For higher sums insured, additional medical verification including blood tests and reports from doctors is usually required.
Where do I get TPD insurance?
Many people already have some insurance through their super fund as part of their employment agreement. To see what level of cover you have through your super fund:
- Check your member statement
- Contact your super fund by phone or through their website
- Read your product disclosure statement (PDS)
However, many people are still looking for a better option which would have higher premiums, but lower rates.
Different super funds or insurance companies are offering a wide range of covers to satisfy your needs. However it’s important to speak to a financial adviser about your situation and options before you take out any type of cover. A financial adviser can set up your insurance in an appropriate way for you.
You can purchase TPD cover from an insurance company directly or through your super fund, a broker, a financial planner or a bank.
Should I get TPD insurance?
Everyone thinks it can’t happen to them. These terrible accidents or debilitating diseases happen to other people. Unfortunately they can and do occur and if so, being able to rely on insurance payment can be a huge relief. It won’t bring a person back to where they were, but it will go a long way to helping them reinstate their life as best they can. And it will certainly help their family cope and move forward.
When deciding if you need TPD cover, you must determine whether your level of private health insurance would cover your medical and financial need in case of permanent disability. Furthermore, it`s good to consider and assess other types of life insurance you have. Especially through your super fund or private insurance. It’s important to ask yourself how much income you and your family would require to live if you can’t work for a while or forever. It’s essential when deciding whether to consider a TPD cover or not.
TPD insurance cover can help you meet the daily living expenses and other costs that follow when you have been rendered permanently disabled and unable to return to work again.
Expenses covered under Total and Permanent Disability Benefit Payment
- Hospital and medical bills
- Rehabilitation costs
- Specialist treatment or medications
- Modifications to your home and vehicle
- Costs of a permanent housekeeper or nurse
- Mortgage or rent payments
- Bills and utilities
- Education expenses
TPD insurance provides a regular source of income to ensure your family can maintain their current way of life in the event that you are unable to return to full-time work.