Total & Permanent Disability

What is Total & Permanent Disablement Insurance?

Total and Permanent Disability insurance (TPD) provides a lump sum if you suffer an illness or injury that leaves you totally and permanently disabled. TPD insurance benefits are often used to eliminate debts, pay for medical expenses or fund any permanent lifestyle changes resulting from disablement.

TPD products vary in their definitions of what ‘totally and permanently disabled’ means. It is important to do your research, speak to a financial adviser, and be sure you have a product that allows you to claim under one of the following four definitions.

1.  Unlikely to ever work in your ‘own’ or ‘any’ occupation again.
2.  Permanently unable to perform two of the following ‘Activities of Daily Living’ without someone else’s physical help:

  • bathing and showering
  • dressing and undressing
  • eating and drinking
  • using a toilet to maintain personal hygiene
  • getting in and out of bed (or a chair or wheelchair)
  • moving from place to place by walking, wheelchair or walking aid.

3.  Loss of sight or use of limbs.
4.  Suffer significant cognitive impairment (dementia-type illnesses).

What is the difference between an ‘own’ or ‘any’ occupation definition?

Most companies allow you to choose whether you want coverage against being unlikely to be able to work in your ‘own’ occupation or in ‘any’ other occupation again, after suffering an illness or injury. For example, a surgeon who injures her hands in a car accident may not be eligible for benefits under an ‘any’ occupation definition, as she is still qualified (and able) to work as a general practitioner.

However, if the surgeon has an ‘own’ occupation policy, she may be eligible to claim, as she is unlikely to ever work as a surgeon again. ‘Own’ occupation TPD provides a greater level of coverage. Your financial adviser will be able to help you choose the best definition for your personal circumstances.

How much is enough?

How much Total and Permanent Disability insurance you require depends on a number of different factors. Your financial adviser can assist you to accurately assess your circumstances and calculate the appropriate level of cover to protect you and your family.