What Is Total And Permanent Disability Insurance?
The world today exposes you to numerous risks and when you have a family or dependents, it is important to protect their wellbeing in case an unfortunate event compromises your ability to earn an income. In contrast to life insurance, TPD insurance pays you benefits while you are still alive but unable to work.
What is total and permanent disability?
Total and permanent disability describes a physical or mental condition resulting from an injury or accident that is medically considered severe enough to prevent you from carrying out your normal work. Total and permanent disability is also a prerequisite for a court awarding damages to you in case you suffer total and permanent disability sustained due to someone else negligence or intentional attack.
Generally, TPD insurance providers define total and permanent disability in one of two ways. The first is the inability to ever work again in your own occupation or the job in which you were when the disablement occurred. The second is the inability to ever work again in any occupation your training or experience makes you suitable for. It is also worth noting that the inability to work for several years does not automatically mean you are permanently disabled.
When it comes to your TPD insurance policy, different insurance companies provide different definitions for total and permanent disablement. For instance, disability benefits may differ depending on the type of injuries you sustain. In such a case, you need to be covered against the most likely risk you run in your day to day living. For instance, if you are involved in arc welding, you would probably require more coverage against blindness as opposed to coverage for breaking your back.
Do you need TPD insurance?
When deciding whether you require TPD insurance cover, you need to think about your level of private health insurance as well as other types of insurance you may have, including those you get through your super fund. In addition, the policy could be taken out separately or added on to your life insurance policy. In such a case, the benefits paid would be deducted from your life insurance cover when you eventually die. It is also important to think about how much income your family would require if you could never work again, more information here.
To some extent, TPD insurance is just as important as life insurance because your inability to earn an income to provide for yourself and your family due to disability would have the same financial impact as your death. In order to get the best possible TPD insurance policy, it is important to take your time to consider the various policies available so you know exactly what is on offer at a cost you can afford. Note that a cheap policy may not necessarily provide adequate cover for your main risks. Read: How to get a student loan for study
Ideally, your TPD insurance policy should help you obtain the expert medical care you need and provide the finances to make any structural changes you may require in your home for your comfort. In addition, you should be able to pay all your bills and ongoing debts, including mortgages and credit card payments. Now you have knowledge about the question “What Is Total And Permanent Disability Insurance?” after reading this article.