Total and Permanent Disability insurance (TPD) is designed to help take the pressure off you financially if you suffer an illness or injury that leaves you totally and permanently disabled. The lump sum benefit paid is often used to eliminate debts, pay for medical expenses or fund permanent lifestyle changes. For example, moving to a home that is more accessible for your condition.
The definition of what a ‘total and permanent disability’ is will vary depending on the particular product and insurance policy. Most companies allow you to choose whether you want coverage against:
- being unlikely to be able to work again in your ‘own occupation’ following an illness or injury or,
- being unlikely to be able to work again in ‘any occupation’ following an illness or injury.
For example, if a surgeon injures her hands in a car accident she may receive a payout under an ‘own occupation’ definition as she’s unlikely ever to work again as a surgeon. However, she might not receive a payout under an ‘any occupation’ definition as she can still work as a GP based on her education, training and experience.
MSB Financial Consultants can help you consider, among other things, what may be most appropriate for your personal circumstances.
How much TPD insurance you’ll need depends largely on your personal situation. The right amount of cover means that, in the event of serious illness or injury, you’ll have funds available to:
- Pay off the mortgage and other debts
- Make home modifications or pay for rehabilitation
- Pay for nursing or other medical care
- Meet ongoing household expenses
- Pay for your children’s education
- Top up your income as Income Protection will only cover 75% of your annual turnover