Total and Permanent Disablement Insurance (TPD Insurance)

What is Total and Permanent Disablement Insurance (TPD Insurance)?

Total and Permanent Disablement Insurance (TPD Insurance) pays you (the life insured) a lump sum should you suffer a total and permanent injury or illness, which prevents you from returning to work as defined by the Insurance policy definitions.

Total and Permanent Disablement Insurance generally refers to a disability that prevents the insured individual from ever returning to work. However, this definition can vary between insurance providers and for stronger policies the definitions can cover never returning to work in your own occupation. For lesser policies the definition can cover never returning to work for any other occupation for which you are reasonably suited by education, training, or experience. Some providers may even have a re-training clause for a different occupation.

Each policy can be very different so it is important to have an understanding of what type of TPD cover you have in place or might need.

Why is Total and Permanent Disablement Insurance Important?

Total and Permanent Disablement Insurance cover is important because if you have no income, with increased medical costs, this can significantly impact the lifestyle and financial health of yourself and those around you. A permanent injury or illness can make it difficult or impossible to return work so it is important to have that financial safety net to help support you and your family.

What Should Total and Permanent Disablement Insurance cover?

Typically, Total and Permanent Disablement Insurance allows for the payment of items such as:

• Nursing and in-home care,
• Rehabilitation,
• Medical care,
• Home or vehicle modification,
• The balance of your home and/or investment mortgage,
• Children’s education and other costs, or
• Ongoing income for you and your family so they can maintain their standard of living.

Importance of seeking Financial Planning advice for Total and Permanent Disablement Insurance

It’s essential for individuals considering Total and Permanent Disablement Insurance (TPD Insurance) to carefully review the terms and conditions of the policy, including the definition of total and permanent disability, any exclusions, waiting periods, and the amount of coverage provided. Premiums for TPD insurance can vary based on factors such as age, health status, occupation, and the level of coverage selected.

Also holding your TPD policy in super can make it harder for you to access. You need to meet a condition of release before payment can be made, and payments need to be approved by the trustee of the fund. TPD payments may also be subject to tax, and this can reduce the amount you receive on a claim. You should carefully consider the requirements of the trustee and trust deed of your fund before holding your TPD policy in super.

To obtain TPD cover that holds appropriate policy definitions and is cost effective in comparison to the market then speak to Sterling Grange Financial Planning to receive expert professional insurance advice.