What is Total & Permanent Disability (TPD) Insurance?
Total & Permanent Disability (TPD) Insurance is designed to help take the pressure off you financially if you suffer an illness or injury that leaves you totally and permanently disabled. The lump sum benefit paid is often used to eliminate debts, pay for medical expenses or fund permanent lifestyle changes. For example, moving to a home that is more accessible for your condition.
The definition of what a ‘total and permanent disability’ is will vary depending on the particular product and insurance policy. Most companies allow you to choose whether you want coverage against:
- Being unlikely to be able to work again in your 'own occupation’ following an illness or injury or,
- Being unlikely to be able to work again in 'any occupation’ following an illness or injury.
For example, if a surgeon injures her hands in a car accident she may receive a payout under an ‘own occupation’ definition as she’s unlikely ever to work again as a surgeon. However, she might not receive a payout under an ‘any occupation’ definition as she can still work as a GP based on her education, training and experience.
A Suncorp Financial Planner can help you consider, among other things, what may be most appropriate for your personal circumstances.
How much is enough?
How much TPD insurance you’ll need depends largely on your personal situation. The right amount of cover means that, in the event of serious illness or injury, you’ll have funds available to:
- Pay off the mortgage and other debts
- Make home modifications or pay for rehabilitation
- Pay for nursing or other medical care
- Meet ongoing household expenses
- Pay for your children’s education.
To discuss the level of TPD insurance that’s right for you, make an appointment with a Suncorp Financial Planner.
TPD insurance from Suncorp
Suncorp Financial Planners can work with you to determine an appropriate level of cover for your needs. And because we undertake an assessment of your current situation and medical history, the insurance you’ll receive is likely to be more relevant and cost-effective.
TPD insurance can be purchased in a number of ways:
- As a stand alone contract; or
- As an addition on a life insurance policy.
Customer case study
John is a 52-year-old general medical practitioner who works during the week in a suburban medical centre. His main passion in life is his hobby farm two hours from the city.
John and his wife Anne bought the property three years ago, with the plan that he would work full-time for another six or seven years. After that, all their children would have left home and completed university, and they would sell the family home and move to the country permanently. This would also allow time for John to renovate the derelict farmhouse on the property so he and Anne could live there.
Six months ago, he was spending another weekend renovating the farm house. While propping up some floor timbers he dislodged a large wooden beam, which fell on him. It caused a severe fracture of the left knee, head lacerations and concussion, a fractured shoulder, three broken ribs and four fractured vertebrae.
Knowing first hand through his professional life the effects that injury and illness can have on people's lives, John had always been a believer in having adequate insurance protection for himself and his family. Many years before he had worked with his financial planner and had taken out a comprehensive insurance plan. He had always been careful to keep the plan updated over the years, particularly when major events had happened, such as the birth of his children, and when he and Anne had bought a more expensive house.
John had a TPD policy worth $1.125 million with an 'own occupation' definition. Relatively soon after his accident, he received medical advice that while he had the capability to return to some form of work, he could never again work in medicine as a general practitioner. His claim for 'own' occupation TPD was approved, and the payment made.
Although his injuries prevented John from retiring from medicine on his own terms, the payment funded all his medical and rehabilitation bills, and also enabled him and Anne to still fulfil their plan of retiring to the farm once the children had left home. He will also now be able to fund their university education from his insurance payment.
Anne was particularly pleased that the insurance payment also enabled them to engage a professional architect and builders to complete their dream home.
Based on a real claim. Names have been changed. This is an example only. Grounds for making a claim and level of benefit can vary from one policy to another depending on their terms.