Elders Financial Planning - Perth
Total and Permanent Disability insurance (TPD) provides a lump sum if you suffer an illness
or injury that leaves you totally and permanently disabled.
TPD insurance benefits are often used to eliminate debts, pay for medical expenses or fund any permanent changes to your lifestyle that are necessary as a result of your disablement.
TPD products vary in their definitions of what ‘totally and permanently disabled’ means. It is important to do your research and be sure you have a product that allows you to claim under one of the following four definitions.
1. Unlikely to ever work in your 'own' or 'any' occupation again.
2. Permanently unable to perform two of the Activities of Daily Living without the physical
assistance of someone else:
bathing and showering, dressing and undressing, eating and drinking, maintaining continence
getting in and out of bed (or a chair or wheelchair).
3. Loss of use of limbs or sight.
4. Suffer significant cognitive impairment (dementia type illnesses).
What is the difference between an 'own' or 'any' occupation definition?
Most companies will allow you to choose whether you would like coverage against being unlikely to be able to work in your 'own' occupation or in 'any' other occupation again, after suffering an illness or injury.
For example, a surgeon who injures her hands in a motor vehicle accident may not be eligible for benefits under an 'any' occupation definition, as she is still qualified (and able) to work as a general practitioner.
However, if the surgeon has an 'own' occupation policy, she may be eligible to claim, as she is unlikely to ever work as a surgeon again.
'Own' occupation TPD provides a greater level of coverage. Your financial adviser will be able to talk to you about the best definition for your personal circumstances.