Understanding TPD insurance

 Have you ever wondered what you’d do if you suffered a life-changing injury or illness that stopped you from working again? Total and Permanent Disability (TPD) insurance can help – but many people don’t know what it is or how it works. 

What is TPD insurance? 

TPD insurance provides a lump sum payment if you become totally and permanently disabled due to illness or injury and can no longer work. How you spend the claim benefit is up to you, but it’s often used for living expenses, mortgage or rent payments, in-home nursing support, rehabilitation or other medical expenses. 

What does it cover? 

Every insurer defines total and permanent disablement slightly differently, but generally, insurers will cover you if you are unlikely or unable to work in any occupation based on your education, training or experience or your own occupation again.  

Some TPD policies also include definitions that cover loss of limbs, sight, hearing or paralysis. 

You should always carefully read the Product Disclosure Statement (PDS) to ensure you understand the exact definition applicable to any cover you may choose.  

Depending on your insurer, you may be able to choose the following types of cover: 

Your own occupation – you’re unlikely or unable to ever work again in the job you were working in before your claimed event disability.  

Any occupation – you’re unlikely or unable to ever work again in any job suited to your education, training or experience.  

Many people have some TPD cover through their super fund, often as default Any Occupation cover. 

What’s the difference between the NDIS, TPD insurance and Trauma insurance? 

If you have a permanent and significant disability, the National Disability Insurance Scheme (NDIS) may provide support for things like transport, medical treatments or help with daily activities.  

Trauma insurance is designed to pay you a lump sum if you experience a serious illness or injury, which is from a defined list provided by the insurer, and the insurer does not consider whether or not you will be able to return to work. TPD insurance offers a lump sum payout if you are permanently disabled and can never return to work again. 

How much TPD insurance do I need? 

The answer to this question will be different for everyone. You’ll need to consider your financial situation, needs and objectives when making a decision on whether TPD insurance is right for you and if so, how much you would like to be covered for.  

A well-designed mix of life insurance products, including TPD insurance, can help protect you and your loved ones against the impact of illness or injury, whether it’s short-term, long-term or permanent. If you’re interested in exploring how TPD could help support you and the people you care about, reach out to the team at ADR Wealth – we’re here to help. 

Source: TAL 

Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision a copy of the Product Disclosure Statement (PDS) and applicable Target Market Determination (TMD) should be obtained from the issuer and read prior to making any decision to acquire or continue to hold any financial product.