What is Total & Permanent Disability Insurance?

This type of insurance provides a lump sum payment if you become totally & permanently disabled. The meaning of total & permanent disability is defined in each policy document. Some occupations have an option as to which meaning of total & permanent disability can apply.

The benefit is normally provided as a payment to life insured if they are unlikely to ever return to work. Total & Permanent Disability insurance or TPD as it is known is usually purchased with life insurance and can also be purchased on the same policy as income protection and trauma insurance or on a stand alone basis. There are two types of definitions with TPD insurance the first definition is the more superior definition and is called “own” occupation TPD and is paid if it is unlikely that you can ever perform the duties of your “own” occupation ever again.

The second definition is “any” occupation TPD and is paid if it is unlikely that you can ever work “any” occupation ever again. The “own” occupation definition is generally only available for specific occupations and we will do whatever we can to ensure you get the best definition available to you. Premiums are generally not tax deductible and therefore are not taxable. Premiums may be tax deductible only if the insurance is held inside of the superannuation environment much like life insurance.

Why do you need Total Disability Insurance?

• If you can’t work again, you still need capital to survive and pay off debts.
• You may have greater expenses.
• You may need to make provision for retirement.
• You may want your family to maintain their lifestyle even if you can’t work.
• You are a partner or co-director in a business and you want to ensure the ongoing financial stability of the business should a partner or co-director become totally and permanently disabled. You also want to ensure that the disabled partner or co-director is financially secure.
• You own a business where an employees ability or input is vital to the profitability or success of your business; that employee is a 'key person' so you may want to insure that person in the event that they are totally and permanently disabled.
• TPD insurance, life insurance, income protection and trauma insurance should be a part of any good financial plan and is there as a safety net if you may ever need it.