Just as Life Insurance is designed to provide an income stream for your family in the unexpected event of your passing, and just as Income Protection is designed to provide an replacement income stream directly for you in the event you get sick or lose your job, Total and Permanent Disability Insurance (TPD) is designed to provide for you in the event of serious, permanent injury.
The difference between TPD and regular Income Insurance is that Income Insurance is a short-term payment typically paid as a monthly regular benefit, whereas TPD provides a large fixed amount with the expectation that you won’t be able to return to work.
That is, TPD provides an agreed “lump sum” payment should you be classified as being permanently disabled and never likely to perform:
your usual occupation; or
an occupation for which you are qualified by reason of education, training and experience; or
Different insurers go by different definitions of what it means to be totally and permanently disabled.
Generally, the more generous the definition, the more expensive the cover.
TPD can help cover all your basic needs and the needs of your dependents, such as rent and food, as well as costs that might be associated with medical treatment, and having to arrange for a carer or nursing support.
There is a waiting period before payment is made which varies between insurers but is typically classified as being 6 months.
Benefits are generally considered tax free, but this may not always be the case depending on ownership of the policy. (You should consult your Accountant for formal confirmation.)
TPD insurance may be especially important if you work in an occupation where people are at a higher risk of injury or disability. However, TPD insurance isn’t just for higher risk occupations and can provide security to people of all ages and all job types.
Like other kinds of insurance, the application process will have a screening process based on a variety of factors, such as past medical history. Pre-existing conditions are not covered.
Just like Life Insurance and Income Protection, there are many insurance products available in this space and so it’s important to know what exclusions apply to your policy.
To get straightforward advice and find the best coverage that’s right for you without paying more for premiums than you need, speak to a CorpSure advisor for an obligation-free confidential discussion.
With a combined 200+ years experience, our highly qualified experts understand the importance of insurance across all aspects of business and provide innovative insurance solutions.