Total and Permanent Disablement (TPD)
Total & Permanent Disablement (TPD) insurance will pay a lump sum or income stream in the event of illness or injury that renders you disabled and prevents you from working again. The majority of TPD claims are for cancer and mental illness. Partial payments are also payable in certain circumstances (eg. Loss of limb). If you have an accident or illness which isn’t fatal, the TPD benefit may act as a safety net. The lump sum proceeds can be used to replace further income that is lost, settle debt or to pay for lifestyle adjustments such as wheelchairs, ramps and manual care controls.
The two primary definitions for TPD are 'ANY occupation', which pays the insured if they are no longer able to work in any occupation to which they are reasonably suited, based on education training and experience, and 'OWN occupation', which pays out if the insured is unable to work in their usual occupation.
TPD insurance can be taken inside or outside of the superannuation environment. It is important to note that all current and relevant superannuation legislation applies (eg. capacity to contribute, contribution caps etc.).
By holding TPD cover through the superannuation environment you must not only meet the insurer’s definition of TPD upon claim, but also meet the permanent incapacity condition of release in the SIS regulations to receive a disability super benefit.
Since 1 July 2014 OWN occupation TPD can no longer be set up inside the superannuation environment.
If you would like to know more about this product and how it can protect you, please contact us.
Any advice or recommendation that may have been implied is General Advice only. Please be aware that we have not taken into consideration your needs, objectives or financial requirements. Before deciding to purchase a financial product, you should read the Product Disclosure Statement to ensure the product is suitable for your needs.