What is Total Permanent Disablement (TPD)?
What is Total Permanent Disablement?
The TPD acronym is representative of Temporary and Permanent Disability (insurance) essentially meaning should a serious injury make it difficult or impossible for you to continue to work then you might be eligible to make a claim under this insurance to support you and your family during this difficult time.
Examples of conditions that could warrant TPD cover include back injuries, amputations, fracture/breakages etc.
Why should I have TPD insurance?
The purpose of having TPD insurance in place is to protect you and your family from any financial loss due to a long term disability and the impact of not being able to work.
Can my TPD premiums be paid from my superannuation?
Yes, TPD Insurance may be paid for by your superannuation fund allowing everyday Australians peace of mind and financial cover pertaining to a debilitating event occurring without the concern of the premiums affecting their everyday lifestyle and cost of living.
What types of TPD insurance can I apply for?
As TPD relates to the claimant’s inability to perform their job due to an unforeseen disability, there are two options of cover available; own occupation and any occupation.
What is the difference between ‘any occupation’ cover and ‘own occupation’ cover?
Under the definition of “own occupation”, it means the claimant will only be covered if they are unable to perform their current job as a result of their disability. However if they can perform another job, they would not be able to make a successful claim as they can simply work in another capacity.
Under the definition of “any occupation”, the claimant is unable to perform their own job or any job to which they are personally suited based on their education, training and experience.
Whilst “any occupation” is harder to make a successful claim, it’s important to remember the psychological impacts of someone who is highly qualified being forced to work a job which isn’t reflective of their previous calibre of training and education. i.e. a doctor who is disabled now having to work at a call center because of injured hands.
The story of Jack
Oak Financial Planning recently settled a case for Jack* who had been suffering from acute Osteoarthritis for quite some time and had long been unable to work in his current vocation as a delivery driver from the impact and extent of his condition.
Unfortunately the degenerative disease also meant that his condition would progressively worsen and affect his ablity to work completely. Jack was effectively unaware that he held TPD insurance as the premiums were paid via his superannuation fund, and he had taken it out so long ago that he had forgotten about what he was currently covered for.
As a result of being unable to work for over a year with no regular income and medical bills pilling up, Jack was stressed thinking about having to face bankruptcy and there just seemed to be no light at the end of the tunnel.
After a review with Jeremy Douglas and a detailed look at his superannuation fund, which showed Jack’s policy covered him for $650K of TPD insurance and income protection insurance.
Fortunately for Jack, the TPD cover was for “any” occupation meaning there was no risk he would be forced to find a job he could barely do, and try to adjust to his new lifestyle which would have occurred under “own” occupation.
Jack has now received the full $650K from his TPD and income protection insurance claim which has been invested accordingly earning him a healthy amount of income every month. Jack is now able to move on with his life and focus on his health and wellbeing, and that peace of mind is priceless.
Article written by Jeremy Douglas, Financial Planner at Oak Financial Planning.
*Client name has been changed for privacy reasons
Valkyrie Private Wealth Management Pty Ltd ABN 78 126 751 335, trading as Oak Financial Planning is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, Australian Financial Services Licence and Australian Credit Licensee, 322283 (AFSL), 374627 (ACL).
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