Total Permanent Disability insurance, or TPD, pays a lump sum if you become totally and permanently disabled because of illness or injury. It provides a financial safety net to help support you and your family and pay for medical and rehabilitation costs.
There is no set cover for TPD insurance and you can choose the amount of cover you want. TPD is primarily used to pay for the following:
- Medical care
- Rehabilitation
- Nursing care
- Home modification costs – e.g. ramps, handrails etc
- Mortgage and personal debt
In deciding the amount of TPD cover, you need to look at your financial situation and how your life could be affected in the event of you becoming totally and permanently disabled.
You can generally get 2 types of TPD policies. They are ‘own occupation’ and ‘any occupation’.
Own Occupation benefit is payable if a certified doctor deems that it is unlikely for you to ever return to your specific occupation in your field of work.
Any Occupation benefit is payable if you are unable to perform the duties of your regular occupation and you are also unable to work in any other occupation that may be suited to your education, training or further experience.
The own-occupation cover provides you with the greatest opportunity to make a successful claim because the terms are far more specific. You don't need to prove you can't work. You just need to prove you can't work in the job you were currently doing. It's far harder for insurers to dispute your claim, so it'll be accepted quicker.
Conversely, the terms for any-occupation cover are quite broad so an insurer could argue there are suitable jobs you could perform, some of which might bear little resemblance to your previous occupation. However, this cover is the cheaper as it's harder to make a successful claim for a disability.
