We all tend to take our bodies for granted, and often put too much faith in the ability of our bodies to progress us through life; however, we also know that illness or injury is always a possibility.
Even if we take the time to eat well, exercise and look after our bodies, unfortunately we never know if things will take a turn for the worse. Serious illness or injury could strike at any time which is why having appropriate Insurance cover is needed to ensure we are financially secure in times of need. We all consider insurance options such as health insurance, life insurance and income protection insurance, but have you ever considered Total and Permanent Disability Insurance?
A comprehensive TPD Insurance policy is the best option available to protect you and your family against the financial stresses of becoming totally and permanently disabled and unable to work and earn an income. As financial advisers, we can explain what TPD insurance is, how it will benefit you and offer recommendations on the level of cover and type of policy that best suits you.
Australians Statistics on Disabilities
Unfortunately the reality is that suffering from a serious illness or injury is life changing and permanent incapacity and the inability to work causes financial stress on you and your family’s lifestyle. You may be surprised how common it is for such a situation to occur.
The Australian Network on Disability (AND) focuses on helping people with disabilities back into the mainstream of life as suppliers, customers and employees. They have some valuable statistics that are very telling about disability in Australia:
- About one in every five Australians suffers from some type of disability (this equates to over four million people)
- Nearly half of those who suffer a disability are of working age, from 15 to 64 years
- Australia ranks 21st out of 29 OECD countries for people who suffer with disabilities and still participate in the labour force
- 39.8 percent of disabled people are employed while 79.4 percent of people without any disability are employed in Australia
- About two-thirds of people with disabilities earn less than $320 per week, compared to one-third of the general population
It is clear to see that the prevalence of disability in our country is relatively high, which is why having support and safeguards in place is so vital. There is no better way to do this than to purchase TPD insurance which is specifically designed to protect individuals should they suffer illness or injury resulting in permanent disability.
Total and Permanent Disability Insurance – Why You Need It
Most people would jump to the conclusion that when they buy life insurance, they give themselves sufficient levels of protection. They feel that their life cover would be more than enough for dealing with any eventuality. This might be the case in the event of their death however it does not take into account all the add-on expenses for treatment, ongoing care, lifestyle changes and rehabilitation brought on by a disability.
A total and permanent disability insurance policy pays a lump sum amount if the policyholder becomes disabled to the extent where doctors deem the disability as both total and permanent. Such disabilities generally mean that the individual would never be able to work again. However, the definitions of this cover could vary between the different insurance companies. Therefore, to gain a complete understanding of what your policy covers and excludes you would need to read the terms and conditions of each policy or go through this with your adviser.
Individuals with a disability not only need to meet their daily living expenses. They also need to face the fact that they would not be able to return to work again. The expenses involved when inflicted with a disability can also be fine. For example, a disabled person would also need to pay:
- Hospital Expenses
- Medical Expenses
- Additional care expenses
- Rehabilitation Expenses
- Expenses incurred because of specialist treatment or medication
- Expenses incurred because lifestyle changes e.g. modifications to the home and vehicle etc.
Meeting daily living expenses is difficult enough but if you suffer a disability, it becomes even more difficult. TPD Insurance helps people who have become disabled meet these expenses. It also helps the family of the incapacitated individual continue to maintain their current lifestyle. Given that disabilities affect one out of every five Australians, this cover could be invaluable for you and your family.
Determine the Cover You Need for TPD Insurance
Many may find it difficult to work out how much cover you and your family would need if you became totally and permanently disabled. But this is not something to stress about as your financial adviser specialises in assessing your individual financial circumstances and objectives and determining the right amount of cover for you. We can determine the appropriate amount of cover for you by allowing for:
- All your current financial commitments including living expenses, bills and debts
- Your future obligations
- Cost of additional care due to disability
- Meeting emergency expenses
Once we have discussed these details with you, we can explain to you how we calculated our recommended level of cover. Alternatively, if you feel there is a specific amount of cover you require, we can go straight to comparing TPD insurance policies and finding the one that best suits your needs.
It should also be noted that TPD insurance is different from Income Protection insurance. Unlike income protection insurance which provides an ongoing monthly benefit in the event of a short-term or a long-term disability, TPD cover provides a single lump sum benefit in the event of a total and permanent disability. The good thing about having both TPD insurance and Income Protection insurance is that claiming on one policy has no effect on claiming on the other. So in the event of total and permanent disability, you can claim both the lump sum benefit from your TPD insurance policy as well as the ongoing monthly benefits from your Income Protection insurance policy.
The National Disability Insurance Scheme is not TPD Insurance!
As the government rolls out the NDIS, awareness of disability insurance has become more common amongst Australians. Whilst this is a positive initiative from the government, it is very important not to confuse the NDIS with the TPD Insurance that can be arranged through your financial adviser.
The NDIS does not pay a lump sum benefit in the event that you are unlikely to work in any occupation again and it does not provide regular income payments that assist in maintaining your current lifestyle. The NDIS provides “packages” to disabled people aiming to assist with personal care, domestic assistance, any home modifications, aids, etc.
TPD Insurance will provide you with a full lump sum benefit in the event of total and permanent disability. Your financial adviser can hold a critical role here in determining the amount of cover required to meet your objectives and maintain your current lifestyle. Alternatively, you can nominate the amount of insurance you think is necessary for you and your adviser can compare TPD Insurance policies to see which product best suits your needs. In the event of total and permanent disability the lump sum you receive can be used at your discretion to meet your lifestyle needs. There are no limitations on how you use your benefits as applied to the NDIS.
Cover Australia – Your Experts in Life Insurance!
If you are looking for a comparison from several companies for total and permanent disability insurance, turn to Cover Australia, one of the leading life insurance experts in Australia.
For over 30 years, we have been advising and serving all Australians about life insurance products and solutions. We offer you the best advice and service. We also focus on providing you with the cover you need – Whether it is trauma insurance, TPD insurance or Income Protection insurance. Call us on 1300 366 817 for an insurance solution tailored to your requirements.