What is a Total and Permanent Disability (TPD) Insurance?

Total and Permanent Disability (TPD) Insurance provides financial coverage if you are unable to work due to illness or injury and are considered disabled by your doctor. TPD insurance can be useful if you have a chronic condition or suffer from an accident that prevents you from working, though it’s important to note that most personal policies don’t cover TPD events, so you may need to purchase your policy. This guide will go over what TPD insurance does and does not cover, as well as how to choose the right policy and prepare yourself should you ever need it.

Why Get TPD Insurance?

If you are between 18 to 50 years old, don’t miss out on one of life’s most important insurances. It can give you financial freedom when it matters most. By owning TPD insurance, you protect your family from long-term financial burdens that are inevitable in today’s society. You can also continue to enjoy your active lifestyle for as long as possible with ease, knowing that TPD insurance can provide financial support for treatment or home care if you ever get sick or injured and have no income due to illness or injury that leaves you unable to work. 

A TPD insurance could protect you from being left with nothing in case of a severe injury or illness. Unlike income protection, TPD cover doesn’t have to be linked to your job. So whether you’re working casually, on a contract, or unemployed at the time of an accident or illness that makes it impossible for you to continue your career, there are still options available to help protect your hard-earned assets. The main feature of total and permanent disability cover is its lump-sum payment if accepted. Your claim may be paid immediately if you’re disabled for life due to an injury sustained in an accident.

How Much Does TPD Insurance Cost?

TPD insurance policies vary significantly in price and this number will differ based on your age, and whether or not you smoke or have pre-existing conditions. Keep in mind that it may be more cost-effective to get disability insurance through an employer rather than from an independent provider. If you work for a large company and can qualify for group disability coverage via a payroll deduction, your premiums could be about 60 percent lower than buying through an individual plan.

How Do I Claim on My TPD Insurance Policy?

TPD insurance provides financial protection against becoming totally and permanently disabled. When you take out your TPD insurance policy, you will be asked to nominate your occupation as well as any secondary occupations that you can do if you are totally and permanently disabled. If you suffer a total and permanent disability that falls within your nominated occupation or secondary occupations, then it is likely that any policy benefits will be payable on an ongoing basis rather than in one lump sum. There may also be benefits payable in respect of dependants who rely on your income. Each insurer defines these dependants slightly differently, so check what coverage is included when taking out your policy.

Signs and Effects

Unfortunately, there are many reasons why you may need to take time off from work. Whether you suffer from a long-term illness or accident, it’s important to know that your income stream won’t dry up if something unexpected happens. That’s where disability insurance comes in. What exactly is disability insurance? Simply put, disability insurance helps replace your income if you are no longer able to work due to an illness or injury that lasts at least three months. In other words, your coverage kicks in once you can no longer perform your job duties—and continue doing so for at least three months straight—due to a medical condition or injury.

Facts and Figures

According to Australia’s Department of Human Services, there are currently 1.5 million people claiming disability benefits in Australia. This number is growing at almost 2% per year, meaning that within 5 years, it will have reached 3 million Australians receiving disability benefits. What’s more disturbing, though, is that one-third of these claims are from people under 35—that’s 300 000 younger Australians on welfare due to their inability to work for whatever reason. The reason for such high numbers isn’t necessarily because younger Australians are less capable of working or lazy; rather, it has everything to do with changing legislation around workplace safety and employee health regulations in Australia. So what can you do if you happen to be one of those younger workers who gets laid off?

Example

The first type of disability insurance you should consider is that provided by your employer. A good majority of large companies provide some form of disability insurance for their employees as part of an overall employee benefits package. However, not all employers offer disability coverage, so it may be wise to check with your company about exactly what forms of disability insurance are offered. In addition, you may want to look into supplemental TPD policies; these policies can fill in some of those gaps left by company-sponsored plans. The more income protection you have, the better off you’ll be if something happens that prevents you from working full-time.