Life insurance is about providing the protection for your biggest asset – your ability to provide for your family. It provides a lump sum of money to your family if you die or are diagnosed with a terminal illness. The latter is payable when the insured is diagnosed with less than 12 months (in some cases 24 months) to live. This allows the person to settle their affairs and ensure their family has no financial concerns after they pass away.
Total and Permanent Disablement (TPD)
Total and Permanent Disability Insurance cover is a lump sum payment designed to relieve financial pressure if you are unlikely to return to work due to an illness or serious injury.
It provides you with a financial safety net in case you can’t work again, and is often used to eliminate debts, pay for medical expenses or fund any permanent lifestyle changes, like wheelchairs, medical expenses and required design changes to the home.
The definition of total and permanent disability can vary from provider to provider, and policy to policy. When researching this type of insurance, it’s important to distinguish this and ensure you understand at what point a benefit may be paid.
TPD insurance can often be held through your superannuation account, but will have its own rules of benefit payment and tax consequences. It is usually more restrictive if held through superannuation, so it is worth discussing your needs with your insurance advisor.