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Total & Permanent Disablement Insurance |
Total and permanent disablement (TPD) insurance covers you for disability that stops you from ever working again. It is a lump sum payment that is generally payable when your doctor/s are able to state that, in their opinion, you will never be able to work again.
It is important to examine the details of the policy, as the definition of TPD can vary markedly from one insurer to another. For example, some provide cover for disablement that prevents you from working in your current job and others cover you where you cannot work in any job.
Premiums for TPD insurance are affected again by factors such as age, health, smoking habits and your occupation. This type of insurance can be obtained inside or outside of superannuation.
You may wonder what the difference is between TPD and trauma insurance. The key difference is the fact that trauma insurance will pay out if you suffer a medical emergency, regardless of how well you survive. However, TPD insurance will only be paid if you are unable to ever work again.
These are the main types of personal insurances that are available. Others include business expense insurance and key person insurance that mainly apply to those operating a small business.
As already stated, the sad fact is that most Australians are underinsured or not insured at all. Your financial planner can assist you to determine which insurance is appropriate for you and the level of cover you need.
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