TPD Insurance Cover – Basic Factors To Consider Before Purchase

TPD Insurance Cover

When you have TPD insurance cover, you are meant to receive a lump sum payment if you become permanently unable to work due to an illness or injury.

The requirements for a successful claim in this type of insurance is that you are totally and permanently disabled and expected to never return to normal work.

This means that you would not be able to earn a living anymore or meet your family’s financial needs. The payout is meant to help you make up for this loss by paying for your ongoing expenses, debts and medical costs. Certain considerations must be made before taking out your insurance.

How to obtain your policy

There are two main ways through which you can get your permanent disability insurance. The first is through an insurance company and the second is through your superannuation fund. Each has its benefits and drawbacks, but generally, holding TPD insurance through super is more cost-effective. However, buying your policy from an insurance company will probably provide better coverage and faster access to your benefits in case you make a claim. It is important to understand the implications of each option before you choose one.

How much TPD insurance cover do you need?

You are meant to set your total and permanent disability payout amount when buying your policy. Taking the time to consider your financial needs, based on your family’s lifestyle, is critical when determining an appropriate coverage. In addition to your ongoing expenses, you should also factor in any debts you may have, including mortgage repayments as well as the amount you would require for medical attention due to the injury or ailment. You should also consider any other insurance covers or savings you may have that could offset your coverage for TPD insurance to lower the cost of your policy.

What type of policy do you want?

There are two main types of TPD insurance policies: own occupation and any occupation TPD insurance policies. Own occupation TPD means that you would receive a payout if you became permanently disabled and could no longer work in your occupation at the time of the disablement. Any occupation TPD means you would have to prove that you are unable to work in any occupation for which you are reasonably qualified. Generally, own occupation TPD insurance cover is preferred, but it is significantly more expensive and only available to certain occupations. TPD insurance is also available for homemakers through home duties TPD insurance, more info here about TPD Insurance. Read: How to find the actual house price

TPD insurance is meant to complement your life insurance because it pays out if you survive an accident or illness but cannot earn a living, which your life cover would not do. You have the option of combining your life insurance with TPD cover for a lower cost or getting standalone policies from the same insurance provider for discounted premium rates. Note that your premiums will be based on several factors including your age, gender, health status and lifestyle. It is important to understand every aspect of your insurance cover and get advice from your financial planner before taking out a policy.