TPD Insurance

TPD Insurance provides a lump sum benefit payment if you become totally and permanently disabled, as defined in the policy.

To claim on TPD cover you usually have to be off work for at least 3-6 months due to sickness or injury, and never be able to return to work again either in your own or any occupation that you have trained, studied or worked in. It will also pay a lump sum if the life insured suffers from a major physical impairment. TPD is when you find it very difficult to carry on with the basic things of your life due to the disability caused to you because of illness or injury. This could include inability to do simple chores like using toilet, getting a bath, getting dressed, doing laundry or cooking. In other words a person suffering from TPD will always need assistance of another human being to carry on even the most simplest of tasks.

The money that you receive from TPD Insurance can be used to cover your debts and provide for medical treatment or ongoing care (nursing/cooking/cleaning), joining a rehabilitation program as well as pay for any home modifications that may be required.

• Tax treatment
  TPD Insurance premiums are generally not tax deductible. The lump sum benefit payment received may or may not be tax assessable / tax-free depending upon policy ownership.
• TPD Insurance Options:
  You can either have TPD Linked to your Life Cover or have it as Stand-Alone. Linked TPD is cheaper as compared to Stand-Alone but it also means that when/if your TPD claim is paid out, your Life Cover will reduce by the TPD amount. You do have the option of Death Buyback which is available at extra cost. If you claim on stand alone TPD, your Life Cover is not affected by the payout.
  
  Either one of the following options need to be selected when you consider TPD Insurance: (note that this option does have a bearing on the premium; any occupation being the cheaper option)
• Own Occupation
  You will be paid if by reason of accident or injury you are unable to work ever again in your own or normal occupation.
• Any Occupation
  You will be paid if by reason of accident or injury you are unable to work ever again in any occupation for which you are reasonably suited by education, training or experience.
  "Own" occupation definitions are generally preferable given that an injury such as loss of one hand may disable a surgeon under such a definition, but under an "Any" occupation definition may leave him able to perform the duties of a GP and therefore not qualify for the benefit. However the "Own" occupation definition is more expensive and may not be available for all occupations. Some companies offer other "home duties" and "modified" definitions of TPD.
• How does TPD Insurance work?
  Darren was a 45 year old Sales manager, married to Sarah and had 2 children. A car accident left him quadriplegic because of a severe spinal cord injury. This meant that Darren could not go back to work in his own occupation or in any other occupation that suited his prior training or education or experience. If Darren had not taken out TPD insurance, they would not be able to make any loan repayments, have money for living and medical expenses and not be able to make any home modifications that would be needed for his condition e.g. wheelchair access. With the $500,000 that he received as a lump sum payment through his TPD insurance he was able to pay off their loans, invest some money, modify their home and buy necessary medical equipment.