Total and Permanent Disability cover is a living insurance policy that provides financial assistance for policy holders in the event that they are permanently disabled and unable to resume work or work in a normal capacity. The disablement must be deemed permanent and total for a claim to be paid. The cover pays a lump sum amount that provides financial relief to help cover mortgage payments, medical expenses and to provide some financial ongoing support for the family. Different insurance providers interpret the terms total and permanent disability differently. In light of this, it is advisable for policy holders to carefully go through the Product Disclosure Statement prior to taking out a cover.
Do I Need TPD Insurance?
Life is full of uncertainties and although it is important to live with hope, injuries and accidents still happen. Living a careful life is not enough to cushion your life against such eventualities. Studies carried out over time show that 1 in every 3 Australians becomes disabled due to an injury or illness before they attain the age of 65. 15 percent of the entire Australian population ends up severely disabled due to an injury or illness when they are between the ages of 15 and 65.
In 2005 alone, 57 percent of workers received financial aid as a result of injuries and disabilities. Every year, 50,000 Australians are diagnosed with heart attacks. As evidenced by these statistics, TPD insurance is important for every individual. The financial hardships that come with permanent disability are overwhelming and most people end up draining their savings, which should be a safety net for their future.
Total And Permanent Disability Insurance Features
Insurance companies package their products to offer different built-in benefits and several additional options. It is up to the customer to initiate an extensive search to find a policy that suits them while paying attention to the benefits. Generally, most TPD policies will carry the following features:
If your TPD is taken out as a standalone policy then a death benefit is paid.
Partial Disability Benefit
A part of the sum insured may be payable if the policy holder suffers loss of one leg, one arm or one eye. This will be included in the product disclosure statement, if such a provision exists.
Guaranteed Future Insurability
Under this feature, you can increase the coverage of your policy during significant life events such as mortgage, marriage and children. This is done without having to undergo further medical checks even if the state of your health has changed.
Under this feature, the sum insured will be adjusted based on the Consumer Price Index; this means inflation is catered for and adjusted accordingly.
TPD Insurance Benefits
TPD cover can make a huge difference in the event that you are permanently incapacitated to work due to permanent disability. Some of the expenses that the cover can help to meet include: rehabilitation costs, bills and utilities, special medication or treatment, cost of a nurse or housekeeper, debts, education expenses, modifications on your vehicle or home, education expenses among other bills.
Kerrie Peacock is always up to date with current developments within the personal insurance industry. She regularly analyzes the available products within the industry. You can get professional advice by visiting www.mecovered.com.au/tpd-insurance-explained to help you get the most comprehensive coverage.