TPD Insurance

Published: June 4, 2013

Total & Permanent Disablement (TPD) Insurance provides a lump sum benefit in the event that you become totally and permanently disabled.

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What is total and permanent disablement?

In order to be defined as being Totally and Permanent Disabled you must meet the following criteria:

  • Been totally and permanently disabled for a continuous period of 3 – 6 months
  • You have been assessed by at least 1 medical practitioner as being totally and permanently disabled. In some cases, insurers will require assessment by 2 medical practitioners.
  • Have undergone all reasonable forms of treatment and rehabilitation
  • In select cases, insurers may ask for other evidence of total and permanent disablement apart from the available medical evidence
  • Meet your policy/PDS total and permanent disablement definition 

TPD Insurance can help pay for:

  • Mortgage, rent or other ongoing obligations you have
  • Medical expenses
  • Home modifications or equipment required as a result of your total and permanent disability (ramps, wheelchairs, special furniture)
  • Day to day living expenses
  • Other debts you may have 

Types of TPD Insurance

Insurers generally offer four types of Total and Permanent Disablement Insurance:

  1. Own Occupation
  2. Any Occupation
  3. Home Duties
  4. Modified TPD

Own Occupation

The most comprehensive type of TPD insurance, Own Occupation provides protection if you are unlikely to ever be able to work in your OWN occupation as a result of a total and permanent disability.

For example, if you run a plumbing business employing multiple plumbers but you still work as a plumber and you lose the use of your arm, an Own Occupation TPD policy can still pay you a benefit as you can still run your business but are unable to work in your own occupation as a plumber.

Any Occupation

The next most comprehensive type of TPD Insurance, Any Occupation provides a benefit if you are unlikely to ever be able to work in ANY occupation for which you are reasonably suited to by way of training, education or experience.

For example, in the plumbing scenario used above, you would not receive your benefit as you ca continue to work running your business. However if you were to suffer total paralysis from the neck down, you would generally receive your Any Occupation TPD benefit as you would in most cases be unable to work in Any Occupation, including running your business.

Home Duties TPD

If you are a home maker or are responsible for looking after the house full time, Home Duties TPD can provide financial protection if you become totally and permanently disabled and unable to perform those duties.

Home Duties Includes:

  • Cleaning the home
  • Shopping for food and groceries for the home
  • Preparing meals for the home
  • Laundry for the home
  • Caring for dependent children (if applicable)

Modified TPD

Generally, Modified TPD is not available to be chosen at the time of your policy application but may be offered once you reach a certain age. Also, ALL policies will convert to Modified TPD at either 65 or 70, depending on your insurer.

Modified TPD pays a partial benefit if you are unable to perform at least two of the activities of daily living:

  • Dressing and undressing
  • Eating and drinking
  • Bathing and/or showering
  • Using a toilet for hygiene purposes
  • Being able to move from your bed or wheelchair or moving with the help of a walking aid or wheelchair

How do I know how much cover I need?

When it comes to working out how much total and permanent disablement cover you need, there are a number of things you need to consider. First and foremost, you need to remember that TPD cover pays a benefit if you become totally and permanently disabled and you need to think about how this may impact on your life.

Total and Permanent Disablement may mean you can never work, drive, cook, clean, or take care of the children ever again. This can significantly impact on you and your family.

Therefore when deciding on the level of cover you need, you should consider:

  • Any mortgage, rent or other ongoing obligations you have
  • Any other debts you have
  • Day to day living expenses
  • School fees and educational expenses
  • The cost of hiring a cleaner, maid or nanny to help with the house work
  • Medical expenses that may arise from your sickness or injuries
  • Home modifications or equipment that may be required – ramps, wheelchair, special bed etc

Combined TPD

Insurers have recently brought out what is known as Combined or Bundled Cover – that is cover that is be combined together to give you more comprehensive policies at more affordable premiums. TPD is generally available to be combined with Life Insurance and/or Trauma Cover however it is also possible to take out as a Stand Alone policy.

TPD Policy Options:

Different insurers will generally offer different policy options for Total & Permanent Disablement Insurance. Generally, the following are available:

Built-in Benefits:

  • Indexation
  • Financial Advice/Assistance Benefit
  • Premium Freeze Insurance
  • Future Insurability

Additional cost Options:

  • Life Cover Buy Back (Combined Policies)
  • Double TPD (Combined Policies only)
  • Business Expenses Option
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