What is 'Total and Permanent Disability' (TPD) Cover?

You may have heard of the term ‘Total and Permanent Disability’. Or perhaps you have heard the acronym “TPD”? But what exactly is TPD and are you covered?

Total and permanent disability (TPD) insurance provides cover if you are totally and permanently disabled. This may arise from an injury or accident, or potentially an chronic illness.

Most people have basic TPD coverage attached to their superannuation fund however other people may hold a separate stand alone policy outside of their super. Many people who have a policy within their super fund may not even be aware that it exists or what level of coverage they may have.

There are a few key things to consider:-

1.            A TPD policy will contain a definition of what it means to be totally and permanently disabled. The relevant insurer will require a minimum level of disability and will also look at the likelihood of a person recovering from a disability.

2.            Whether the TPD cover falls under either an ‘Own – Occupation’ cover of ‘Any – Occupation’ cover. ‘Own – Occupation’ is when you are unlikely to ever return to full time work in your previous job whereas ‘Any – Occupation’ is when you are unlikely to ever be able to engage in any job suited to your education or experience. Generally a TPD policy inside a superannuation fun will only cover an ‘Any – Occupation’ disability which is a broad definition that can be hard to prove.

3.            What is the relevant waiting period? Most policies apply a minimum waiting period from the time you make a claim to when you are paid and these can vary between insurers. A common waiting period is 6 months continuous absence from work however some policies have no waiting period for serious incident such as a major head trauma.

4.            Some insurers require you to meet a minimum level of work before you are eligible to claim TPD cover. They may require you to have performed a minimum length of employment or minimum hours of work per week in order to be eligible.

5.            An insurer may look at your loss of independence and require you to show that you are unable to perform 2 to 3 daily living activities.

6.            Your ongoing medical care may also be a consideration in some policies. An insurer may require you to demonstrate ongoing medical care to improve your condition or to prevent further illness i.e. rehabilitation and regular appointments.

If you are unsure whether you may have a default level of coverage in your super fund, you can review your recent member statement or contact your fund to confirm. One thing to be aware of is that TPD cover can decrease with age.

If you are considering a policy outside of your super fund, there are number of options available and you should seek some advice from an insurance broker as to what option may be most suitable to your circumstances.  

If you have sustained an injury or suffering an illness and would like to explore whether you have a viable TPD claim, get in contact with our team today to discuss.