What is TPD insurance?
Total permanent disability insurance provides for you if you become permanently disabled due to an injury or illness, and are unable to work. By providing you with a lump sum payment, TPD insurance may help cover medical and rehabilitation expenses plus everyday existing expenses that your income would usually cover such as your mortgage or rent and overall lifestyle. This may help alleviate some of the financial concern for you and your family - helping you to continue to live your life as best you can, without worrying about how to cover expenses.
There are generally three accepted definitions when it comes to the type of cover you can take out - own occupation, any occupation and activities of daily living.
What is own occupation TPD insurance?
Own occupation TPD insurance refers to a policy that covers your inability to work in your usual occupation or your field of employment. Generally this means the job you currently have been working in. This means you can claim on your policy even if you can work in a different field. Because it covers more, it generally means it’s more expensive. Consideration of medical and other evidence will be undertaken to determine whether you are incapacitated to the extent that you are unlikely to ever work in your own occupation again.
What is any occupation TPD insurance?
Any occupation TPD insurance covers you if you are unable to return to the employment in any job or role that is suited to your education and experience. Generally, any occupation cover is cheaper compared to an own occupation, but has a higher threshold to claim, so it's less likely to pay out.
What is the activities of daily living definition?
Another way insurance providers may determine whether you can claim on your TPD insurance is by looking at the activities of daily living assessment. This covers the inability to perform everyday living tasks such as bathing, dressing, toileting, mobility and feeding.
Crunching the numbers for TPD insurance
Your ability to claim on a policy will depend on how the insurer defines Total and Permanent Disability (TPD) in their Product Disclosure Statement (PDS) and the type of policy you've taken out. There are advantages and disadvantages to each definition, and how your policy is tailored and how you can claim will depend on the specific definition taken by your insurance provider.
In 2020, TAL paid $857 million in TPD claims helping Australians live a better quality of life if they are permanently disabled and can’t work. If you’re unsure what kind of cover to take out, consult with the experts. They can help answer any questions you may have so you can decide how to move forward with a claim.