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Life Insurance

What is Total and Permanent Disability insurance

Total and Permanent Disability (TPD) insurance is a type of life insurance that provides a lump sum payment that can provide peace of mind and security in the face of severe illness or disabilities. The question of whether Total and Permanent Disability (TPD) insurance should be taken out is a matter of individual circumstances and priorities.

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It’s important to note that the claim requirements for TPD insurance can differ significantly depending on the cover that is held. Therefore, it’s crucial to understand the terms and conditions of the insurance policy before making a decision.

Benefits of TPD insurance

Complementing other forms of insurance, TPD (Total and Permanent Disability) insurance plays a crucial role in creating a comprehensive life insurance portfolio. Unlike other types of life insurance that primarily cover death, specified serious illnesses or injuries, and temporary incapacitation preventing work, TPD insurance offers a potential safety net for individuals facing permanent disability due to illness or injury. In such cases, TPD insurance may provide a lump sum payment, where the insured is unable to work.

In the event of Total and Permanent Disability (TPD), policyholders receive a lump sum payment through TPD insurance, with coverage options for any occupation, their own occupation, or Activities of Daily Living (ADL). The specific definition of TPD applicable to the insured person's policy is outlined in the insured’s policy.

The lump sum payment provides the insured the ability to use the proceeds as they choose. This could include such things as repaying debts, modifying their home for accessibility and contributing towards medical costs including ongoing rehabilitation. This aids in giving peace of mind by reducing the financial burden that can come with a permanent illness or injury.

TPD insurance extends beyond work-related injuries, unlike workers' compensation, which primarily covers workplace incidents. TPD insurance offers coverage for a wide range of injuries and illnesses leading to total and permanent disablement, irrespective of their origin. It is crucial to note that the terms and conditions of TPD insurance can differ among insurers. Therefore, reviewing the Product Disclosure Statement is essential to comprehending the coverage's scope, limitations, and any potential exclusions that may be applicable.

Determining TPD insurance amounts

What should I consider?

The level of TPD cover depends on individual circumstances and priorities.  Below are some costs to consider when deciding how much TPD to apply for:

  • Outstanding debts
  • Replacement of lost income
  • Potential housing modifications needed for rehabilitation or disability
  • Day-to-day living expenses
  • Children's education expenses
  • Reskilling costs
  • Evaluate existing TPD coverage within superannuation.

After establishing the initial figure, it is advisable to explore the potential reduction of this amount by assessing any pre-existing coverage or identifying assets that could potentially be sold.  

TPD insurance cover structure

There are various ways to customise TPD cover to align with specific needs, budget constraints, and individual circumstances. TPD insurance can be organised either as a stand-alone policy or as part of a linked policy, commonly referred to as a rider benefit. This linkage could be with a life insurance policy offering death and/or critical illness benefits.

A stand-alone policy is separate from other life insurance policies. A claim made on a stand-alone TPD insurance policy does not directly affect the benefit amount or the ability to make claims on other life insurance policies. However, it's important to note that stand-alone TPD insurance policies typically come with a higher cost compared to the same TPD coverage integrated into a linked policy.

Claiming TPD

When making a claim on TPD, meeting eligibility criteria is essential, involving adherence to the applicable occupation definition and policy definitions of permanent disability. This process may include providing supporting medical evidence to the insurer. Engaging with the TPD insurer during the claims process may help ensure that all required documentation is provided, which may assist in reducing the process times of any claim.

Total and Permanent Disability cover is a key component of financial planning and risk management. By offering a lump sum amount, TPD insurance serves as a valuable resource, helping to alleviate the financial strain associated with unforeseen circumstances life may present.


To learn more

Learn more about life insurance on the TAL website.

The information you provide on the TAL website will be subject to TAL’s Privacy Statement and Privacy Policy, available on their website.

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Important information 

Any financial product advice provided on this website is of a general nature only and does not take into account your personal circumstances. BankSA refers customers to TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life), the issuer of life insurance policies. TAL Life is part of the TAL Dai-ichi Life Australia Pty Ltd ABN 97 150 070 483 group of companies (TAL). If you purchase a life insurance policy as a result of a referral from us, BankSA will receive a commission of 10% of your premiums (exclusive of GST) for the period you continue to hold a policy.

Before purchasing life insurance, you should read the Product Disclosure Statement (PDS) and the Target Market Determination (TMD) to help you decide if life insurance is appropriate to your objectives, circumstances and needs. You can obtain the PDS and TMD from TAL’s website or by calling TAL on 1300 346 705.

By accessing TAL’s website, you will enter a third-party site not owned by BankSA. Any personal information you provide to TAL's website will be collected, used, and disclosed in accordance with TAL's Privacy Statement and Privacy Policy, also available on their website.

If you would like help deciding whether life insurance is right for you, we recommend speaking to a financial adviser.