Total & Permanent Disability (TPD) – is designed to pay a lump sum if you are unable to work in ANY occupation you are suited to by training, education or experience, due to sickness or accident. Definitions are contract dependent.
TPD cover is valid only when both total and permanent disablement occurs. Most disabilities are either ‘permanent but partial’ or ‘temporary but total’.
The purpose of TPD is to provide a lump sum to cover medical expenses, home modifications and any other additional expenses plus any gap in income protection insurance. If you have the maximum level of income protection insurance the benefits should be enough to replace 75% your lost income, TPD cover can be used to bridge the gap to provide 100% of income replacement.
One critical distinction between TPD policies is whether the policy covers you for your ‘own’ occupation or ‘any’ occupation for which you are suited’.
TPD cover is generally available through super which is generally a more cost effective way to purchase TPD insurance.
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