According to a report by the Casualty Actuarial Society, the provision of Total and Permanent Disability (TPD) insurance has contributed greatly to the increased uptake of life insurance during recent years. This is because people who may not really have any interest in life coverage would still consider buying it, simply because of the TPD feature. In fact, they may even purchase coverage at much higher amounts. No wonder, this feature is provided by virtually all the insurance companies.
Well, before you do go out and seek a Total And Permanent Disability insurance quote, there are several aspects you need to know about such coverage. When you understand these important aspects, you're sure to have even greater appreciation of this insurance product.
Insurers Didn't Always Offer Lump Sum Benefit Payments
At times we might take for granted the lump sum payments made as benefits for TPD cover. However, this has not always been the case. In the early years, the only benefit you would have expected was a waiver of premium (based on a report by the Casualty Actuarial Society). Gradually this model changed, leading to the current situation with lump sum payments as benefits to policy holders.
Why You Have A 6 Or 3 Month Waiting Period
When compared with life cover, TPD insurance claims are much more complicated. For a life insurance policy, proof of death is quite easy to determine, unless an insured person disappears. However, determining that someone is totally disabled for the rest of his/her life is not quite that simple.
This difficulty in proving total and permanent disability created many delays in the early days before claims could be approved. At times it was all a matter of opinion. This wasn't really acceptable, hence a better method of determining permanence of disability was developed, which was total disability that lasted 6 months (90 days).
An example of this is the waiting period by Sun Super which gives 6 months for policy holders who are unable to perform activities of daily living or unpaid domestic duties due to disablement that occurred before 01/ 07/2011. For those whose disablement occurred after that particular date, they would have a shorter waiting period of only 3 months. However, claims for this group of people would only be considered if they were unable to perform two activities even with adaptations and aids.
As you'll realize, claims made following loss of limbs have no waiting period. This also applies in loss of eyesight and cognitive functions. That's simply because such cases are easier to assess.
Insurers Try To Out Do Each Other With Unique Features
Although the TPD cover is a key attraction for many potential clients, insurers still have to compete with one another to draw in such clients. Hence, each company tries to out do the other by offering many interesting features that enhance the benefits of coverage.
Some extra features you might find include: partial payment benefits, increasing cover limits without extra medical evidence, child cover options and even accidental death options. Therefore, you should first evaluate all the features offered by various insurers in order to select the most suitable option for yourself.
Kerrie Peacock possesses long term experience working in the Australian personal insurance industry. She understands the varied needs of different policy holders and how to select the most suitable products. You can visit www.mecovered.com.au/total-and-permanent-disability-insurance-quote to help you select the best coverage.