Suffering a serious illness or injury can substantially alter your life. Making ends meet can be difficult at the best of times, but can be particularly stressful when you are unable to earn an income as well. Total and Permanent Disability (TPD) insurance can help to ease the financial burden of such a life-changing event.
What is ‘TPD’ Insurance?
TPD insurance provides a lump sum payout in the event you suffer an accident or illness that leaves you permanently disabled and unable to return to work. The right cover will assist you to meet medical expenses incurred on permanent incapacity, pay out your debts and cover any day – to – day assistance you may require as a result of your disability. TPD insurance is often packaged with Life insurance and is a good complementary cover to Income Protection insurance.
Why do I need TPD Insurance?
Have you considered how you would mange if you had a stroke, or coronary artery bypass surgery? How would you pay your bills? How would you cover your rehabilitation costs, and for ongoing care? Thanks to modern medicine, the survival rates for these and other illnesses are rising. However, those who suffer them often require ongoing care and cannot return to their regular work1. One quarter of bypass surgery patients never return to work2. They may also discover that private health insurance may be insufficient to meet all the expenses related to these serious illnesses. TPD insurance will provide you with the financial security you need if you do find yourself unable to return to work, including covering expenses, maintaining your lifestyle and even providing for retirement. It’s important to note that a Federal Government Disability Support Pension will only provide minimal financial support, and may not be sufficient to cover all of your debts and potential ongoing care requirements.
How much cover do I need?
The level of cover you need will depend on your financial situat ion. As a guideline, your TPD insurance should be enough to pay out all of your existing debts. If you also have Income Protection insurance, the combination will ensure you are both debt-free and have an ongoing income. Factors that affect the cost of the insurance include your age, gender, occupation and whether or not you are a smoker. Whether you choose to cover your ‘own’ or ‘any’ occupation will also affect your premium. It’s important to note, also, that some pre-existing conditions may make it more difficult for you to obtain cover, or may increase the cost of your premium. Example: A 34 year old male, non smoker, office manager with $500,000 cover under the ‘own’ occupation definition, the premium is $40 per month. Source TOWER Accelerated Protection quote 1/10/2010. Insure & Invest Market can assist you to determine the level of cover you need and find the right insurer and policy for your situation.
Occupations – ‘Own’ vs ‘Any’
The definition of ‘occupation’ in your TPD insurance cover can have a significant effect on whether or not your claim will be paid. If you have a policy that speci fies ‘own’ occupation, you can claim if you are unable to work in your usual occupation. If, however, you have a policy that specifies ‘any’ occupation, you are only able to make a claim if you are unable to perform any occupation that you are suited to by education, training or experience. ‘Own’ occupation policies are more expensive than ‘any’ occupation policies, but are more likely to result in a payment being made.