Total and Permanent Disability (TPD) Insurance

Age restrictions tend to vary across insurers. You can usually take out a TPD policy from 18 years old with many policies covering individuals until they’re 70.

It’s also worth noting that some TPD policies expire once you hit a certain age. However, this can vary, so it may be a good idea to read your PDS or check with your insurer.

Ultimately, this depends on the severity of your pre-existing condition and the individual insurer. In some cases, your policy might include a loading to cover the higher chance of you making a claim, which means more risk for the insurer. With a loading, you’ll end up paying a specified amount on top of your regular premium. In other cases, certain pre-existing conditions might attract an exclusion instead, or the insurer may decide not to allow you to take out cover.

To start the claims process, you need to notify your insurer as soon as possible after an injury or illness. Depending on your disability and what TPD cover you have, your insurer may ask for the following:

• medical reports and test results from your doctor
• details of your work duties
• payslips and tax returns

Based on this information, your insurer will determine if you’ve suffered a TPD (as per the policy terms) and the payout amount.

While some super funds include TPD cover as default, it’s important to check whether your cover offers the protection you’re after in case something were to happen.

Before you take out TPD insurance cover, it may be a good idea to ensure there’s nothing that could potentially get in the way of you making a claim. It’s a legal requirement to take ‘reasonable care’ when signing up for a policy. This means you should be honest and upfront with your insurer when answering all their questions. They’ll usually ask for your:

• age
• job
• medical history and any pre-existing conditions
• family history
• lifestyle (for example, whether or not you smoke can affect your premiums)
• any high-risk hobbies (such as dirt bike riding, or skydiving).

Depending on the provider, you may be required to have a blood test or other medical tests in order for the insurer to get an accurate view on your health and assessment of your risk level.

Yes, depending on your policy and provider, you might be able to insure multiple people on one policy. For example, a married couple could decide to insure both of their lives in one policy. Depending on the insurer, you could be eligible for either a percentage or flat-rate discount on your premiums when a second person is added to the policy.

It’s a reasonable question to ask, since both TPD insurance and income protection insurance come into play if you can’t work due to illness or injury. However, there are some key differences between the two, including:

• TPD insurance is for when you can’t ever work again, while income protection can be for an extended period only, like if you’re sick or injured.
• A TPD insurance payout is a lump sum, while income protection is paid regularly over a set time.
• Money from a TPD policy is typically for often used to make lifestyle changes and covering medical expenses, and income protection benefits are to provide you with some income as you recover.
• You choose your TPD cover amount, while your income protection benefit typically only covers up to 70% of your regular income.

Term life insurance (sometimes just called ‘life insurance) pays a lump sum benefit to nominated recipients if you pass away or, depending on the policy, are diagnosed with a terminal illness. This money can help them maintain their current lifestyle.

TPD insurance does not include cover for your passing. Instead, TPD insurance is for if an injury or illness where you can’t ever work again.