A total and permanent disability insurance cover is meant to provide a financial safety net once you get a permanent disability or a terminal illness and you are completely unable to resume work. You will get a lump sum amount that you can use to meet your financial obligations. You can decide to take out a TPD cover as a standalone cover. You may also decide to take out your TPD insurance as an addition to your life insurance in order to get the best life and TPD insurance cover.
Life insurance provides your beneficiaries with financial security upon your death or once you have a terminal illness. The benefit is paid out as a lump sum, allowing your family members to pay off debts, school fees, mortgage, bills and daily living expenses. The payout will also enable your family to settle the funeral expenses. The cover is effective for any cause of death with the exception of suicide.
Life And TPD Insurance
If you decide to include your TPD cover in your life policy, the benefit paid once you successfully make a claim will replace your life insurance cover. The insurance provider can then go ahead to cancel your life insurance cover and you will no longer need to pay premiums. This means that in the event of your death, there will be no benefit payout linked to your life insurance cover.
The only solution for this scenario is to take out a policy which has the buyback benefit. This means that you will be allowed to purchase back the amount that was paid out to you. This will ensure the continuity of your life insurance policy, enabling you to have the best life and TPD insurance cover.
Many life insurance companies prefer to offer clients three life insurance options - life cover, trauma cover and TPD cover. You can decide to take the covers as standalone or you can take them out through your superannuation fund. However, you cannot take out a trauma cover through your superannuation fund; you need a death cover in order to take out a TPD cover through your superannuation fund.
Selecting A TPD Insurance
When shopping around for the best life and TPD insurance cover, there are a few things to look for. The cost of the premiums is an important factor to consider as you do not want to fall back on your premium payments since the policy may end up being cancelled. You also need to evaluate the various features of the policy and the definitions provided so you can understand the extent to which you are covered. You therefore need to carefully read through and understand the product disclosure statement.
The exclusions and restrictions of the policy are also very important to note as these may render the policy irrelevant to you depending on your circumstances. The amount of coverage under your TPD policy should be sufficient to take care of you in case the event insured against takes place. It is also advisable to carry out a background check of your preferred insurance provider to ascertain that they offer quality services to their clients.
Kerrie Peacock is an insurance enthusiast who spends a lot of time researching on various insurance options available in Australia. For more information on life insurance premiums, visit www.mecovered.com.au/best-life-and-tpd-insurance.