Unlike Life Insurance, Total and Permanent Disability Insurance (TPD) provides a lump sum in the event the policy holder becomes totally or permanently disabled. TPD is designed to help: pay any outstanding debts you might have, help with ongoing living expenses and help pay for medical costs. This type of Personal Insurance is usually combined with Term Life Insurance or Trauma insurance as is generally, relatively, inexpensive. That said, people in some occupations may want it as a standalone policy.
The amount of disability cover required depends on the amount of debt you and/or your family may have.
Types of TPD Insurance
Currently in Australia there are four main types of total and permanent disability insurance available. These include:
- Own occupation – this is where the insured is unlikely to ever work again in their own occupation.
- Any occupation – this is where the insured is unlikely to ever work again in their profession, business or a similar occupation that suits their education, training and experience.
- Home duties – where the insured is unable to engage in any normal domestic duties for a continuous period of at least three months. This type of TPD insurance generally requires increased medical evidence to ascertain the level of incapacitation.
- Modified – where the insured is permanently unable to perform without physical help from a carer or suffers cognitive impairment requiring permanent and constant supervision. Generally policy holders will have been disabled for 3 preceding months and will continue to be disabled in the future.