TPD Insurance – Choosing The Right Policy
Total and permanent disability (TPD) insurance is a policy that is meant to protect you financially in case you are unable to work because of permanent disability.
This type of cover is meant to cover your family’s living expenses, your mortgage payments and any medical expenses that may have arisen due to your injury.
However, it is important to note that the level of cover you receive will differ with each insurer. In order to get the best TPD insurance, you need a clear understanding of what your policy entails.
The definitions for total and permanent disablement often vary between providers. You therefore need to read over your Product Disclosure Statement and understand when you will or won’t be covered. The benefit payout for this type of policy is only payable when you become totally and permanently disabled. Definitions for this include complete loss of sight, loss of use of limbs (both arms, both legs) or an absence of longer than six months from work due to illness or injury with no expectation that you will ever return to normal work, more information here about TPD.
How to get the policy
You can choose between a standalone TPD insurance policy and getting disability protection through income protection. In both cases, you will receive financial benefits in case you are unable to work due to illness or injury. However, it is worth noting that total permanent disability insurance only provides protection in case of long term disability and the benefit comes in a lump sum payment. When you get disability protection through income protection, you can receive coverage for both short and long term disabilities and get a monthly benefit that serves as a replacement income for a limited period.
If you already have insurance policies with one provider, it may be possible to include your TPD insurance for a slight increase in premiums or get a discount for multiple products. You can also obtain total and permanent disability insurance in superannuation. Your policy would be owned by the trustee of the super fund and your contributions would be used to pay your insurance policy premiums, which are tax deductible in most cases. One advantage of doing this is you enjoy tax-deductible premiums and greater cash flow.
Cost and coverage
When you want to get the best possible TPD insurance , you will have to take some time to compare products from different insurance companies. This will give you the opportunity to get a plan that fits your budget and is suited to your requirements. For instance, to avoid cancellation of your policy, you will need to keep up with the premium payments. On the other hand, the level of insurance and protection you want will affect the cost of the coverage. You will therefore need to find the right balance between the price and level of coverage you need. Read: Understanding the Pros and Cons Of Income Protection Australian Super
Making a hurried decision when purchasing your total permanent disability insurance could lead to various problems in the future. Getting the best TPD insurance demands that you take the time to consider your options and compare them against your needs.