What is TPD Insurance?
Total and Permanent Disablement Insurance (known as TPD Insurance) works in a similar fashion to life insurance whereas a lump sum is payable on an event that renders the person insured unable to ever work in an occupation again. The cause of the disablement can be any medical event excluding self-harm or a specific exclusion determined at application by the insurer, and basically includes any medically diagnosed illness or injury. As an example, the majority of claims result from cancers and skeletal injuries.1
TPD Insurance is designed to cover the financial risk of losing the ability to work along with the increased costs of ongoing care. It is common to insure debts, loss of income and additional capital for possible home alterations and ongoing medical costs. It is also common for the level of TPD Cover required to be higher than that of Life Cover as under Life Insurance there is no need to cover the ongoing expenses of disablement, loss of incomes and ongoing medical care.
What TPD Insurance definitions are available?
There are a number of forms of TPD Cover that can be obtained and each type can dramatically alter the requirements and eligibility for claim. These include;
- Non Occupational TPD Insurance – this is a loss of independence style policy and the cheapest available. In order to claim the life insured needs to be unable to independently conduct 2 of 5 listed activities of daily living, for example, bathing or eating. Given the higher severity of disablement required for claim, this style of TPD cover is the cheapest option, however is the most difficult to claim.
- Any Occupation TPD Insurance – Any Occupation TPD Cover requires a person to be unable to work in their occupation again or any occupation to which they are suited via education, training or experience. In assessing claims under this definition, the insurer will first assess the person’s ability to do their own occupation, and then will assess if that person can do another suited occupation. If it is deemed that a person can do another occupation, then the definition will not be met.
- Own Occupation TPD Insurance – Own Occupation TPD Cover requires a person only to be disabled from their occupation. This is the most expensive of the options, however offers the strongest definition and most claim certainty. Should the life insured be unable to work in their occupation but can work in another, this is ignored by the insurer and a claim payment is still made.
TPD Insurance can be linked with Life Insurance or taken as a ‘stand-alone‘ policy. Linking TPD Insurance with Life Insurance generally results in a lower premium, however if a TPD claim is made, it can result in the Life Insurance being reduced by the same amount for a period of 12 months, or indefinitely depending on the policy offered.
Primoris Financial compares TPD Insurance policies from over 12 major Australian Life Insurance Companies. To discuss your TPD Insurance requirements and to compare your quotes contact Primoris Financial on 1300 881 543 or submit a TPD Insurance quote request here.
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