Total Permanent Disability (TPD) Insurance

We never know what lies around the corner for us. Receiving a diagnosis of a permanent disability can turn a life upside down in an instant. In such a circumstance, there are many variables to consider and financial support is an integral part of how you move forward.

Total permanent disability insurance (TPD) also known as long term disability insurance provides you with regular payments if you cannot return to work due to a permanent medical condition. It provides a financial safety net so you can continue paying your ongoing expenses such as your mortgage and other household bills.

If you’re on the fence about purchasing total permanent disability insurance, it’s good to weigh up the cost of being covered vs. the risk of not being covered while taking into account the peace of mind it provides you. Learn how total permanent disability insurance works. Contact MyFuture to help you protect your income due to permanent illness or injury.

What is Total Permanent Disability Insurance?

The term “Total and permanent disability” began as an employment legal term to differentiate between a serious injury so severe that an employee would never be able to return to work (such as paralysis), from a temporary disability such as a broken leg which may inhibit the employee from working for a period of time.

Nowadays, the term is mostly used in the form of total and permanent disability insurance, which is a policy that covers all parts of your income should you become permanently disabled and unable to return to work, or at least the job you were in. Sometimes TPD insurance can be tagged onto your benefits package within an organisation, it could be part of your life insurance or you can purchase it yourself through life insurance companies.

Total and permanent disability insurance is also known as long term disability insurance and is related to short term disability insurance. In some cases short term disability insurance may be converted into long term disability insurance if your disability worsens and becomes permanent. TPD is especially designed to cover disabilities that happen outside of work such as autoimmune diseases.

How Does Total Permanent Disability Insurance Work?

During what is undoubtedly a stressful and traumatic time, you can use your trauma insurance regular payments to provide care to you and your family, while you focus on your quality of life.

It is designed to replace your income so that you can continue to cover any of your ongoing essential financial commitments you may have such as household bills and mortgage or loan payments and also to support you to manage the financial impact of covering any medical treatments or rehabilitation costs.

What is covered under TPD?

TPD is designed to replace the income you would earn if you could continue your job role and the insurance company pays it out in regular increments like a paycheck. In some cases the policy will pay out the entirety of what you would’ve earned but most commonly, it pays a percentage of that salary such as 75%.

Examples of when you might need to use TPD insurance include: 

  • Permanent chronic and/or autoimmune disease that will progress to the point of not being able to work such as multiple sclerosis or parkinsons.
  • Permanent paralysis caused by an accident.
  • Onset of life-altering and permanent mental illness such as dementia.

What is Considered a Total and Permanent Disability?

The word permanent is the deciding term here as the condition needs to be something that you are not expected to fully recover from. Each case in TPD insurance claims are complex therefore are considered individually and you likely will not find a simple list of conditions that are covered like other insurance policies. 

Permanent disabilities can vary widely and some people may still have the ability to work in some capacity. If it means working in a lower salaried role, total and permanent disability insurance may make up the difference in income.

Do I Need TPD Insurance?

Whether or not TPD insurance is right for you depends on what losing your income for health reasons would mean in your circumstances. As with most insurance, we hope it is never needed but it does provide a level of comfort in knowing you will be financially sound should something go terribly wrong. In this unfortunate scenario, total and permanent disability insurance adds a safety net. 

You may benefit from income protection insurance if:

  • Your family is dependent on your income.
  • You are self employed 
  • You have a mortgage or other personal loans that require regular payments.
  • You have limited savings or an emergency fund to cover expenses if you’re unable to work.

If any or all of the above applies to you then it can be a huge benefit to protect you and your family with total and permanent disability insurance while you focus on staying as healthy as possible.

There are many varying income protection insurance policies out there to consider with different coverage and benefits to you. Reach out to our experts at MyFuture today for your no obligation FREE discovery session to create a protection plan for you and your family.