Total And Permanent Disability Insurance What You Need To Know

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Total And Permanent Disability Insurance – What You Need To Know


Kerrie Peacock

Total and permanent disability insurance pays a lump sum in the event that you are critically ill and unable to work. The disablement must be total and permanent. The funds paid out can ensure that you cover your medical expenses, pay off mortgage debts and provide financial support to your family to cater for their day to day expenses. This cover takes on different definitions depending on the provider. You should never make assumptions, especially if you are changing providers or taking out the cover for the first time. The product disclosure statement will have these definitions and it can give you a clear understanding of the circumstances under which you will be covered.

The definition

The benefit is only payable if a medical expert ascertains that you are permanently disabled and unable to carry out certain activities. Each provider will have their own definition but generally, it is paid out to persons who have lost their sight, legs or arms. The other instance is when you have been absent from work six months consecutively and there isn\\’t an expectation that you shall resume.


The importance of TPD insurance

This cover can go a long way in ensuring that you and your family live comfortably even after you are rendered permanently disabled. Some of the expenses that the benefit can help cover include: medical and hospital bills, specialist treatment, rehabilitation costs, debts, bills and utilities, cost of a nurse or housekeeper, education expenses and mortgage and rent payments. In essence, the cover provides income that ensures that your family maintains their current lifestyle in the event that you can no longer work to provide for them. Again, your savings and assets remain untouched and you can still invest and leave a legacy for your children.

How much is sufficient cover?

In general, it advisable to take out at least ten times your annual salary. However, every individual has different needs and a needs-based approach is the best strategy to help you determine what sufficient cover means to you. You must carefully consider your family needs both now and in the future. This is the best guideline in determining the most appropriate cover. There are several steps you can take to help you arrive at this figure.

You can start by listing all your financial commitments and those of your family: children\\’s expenses, education, debts, bills and other ongoing expenses. Consider future obligations such as college fees for your kids. Factor in emergency costs such as medical expenses, rehabilitation costs, vehicle or home modification expenses and nursing care. It is also essential to consider your partner\\’s age and his or her financial contribution. The other factor is the number of kids you have and their ages. You must also determine the time frame during which you have to provide for your children. Sum up these costs and get a cover that reflects this amount.

Take time to compare quotes and features from different insurers to get the best deal. Ensure that you carefully read the terms and understand the policy details.

Copyright (c) 2014 Kerrie Peacock

Kerrie Peacock researches on life insurance extensively in Australia. For more information and advice, log on to


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