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A Beginner’s Guide to Total and Permanent Disability Insurance

Taking out the right type of insurance that suits your needs is essential. It will serve as a financial safety net whenever necessary. That is why it is important to pay attention to what you need and the type of insurance to keep you protected. You may already know this but may still feel overwhelmed when faced with the sheer number of insurance options that are currently on the market.

This blog post will focus on a specific type of insurance: total and permanent disability or TPD insurance. After reading this article, you will learn more information about whether this insurance product is right for you or not. 

Total and Permanent Disability Insurance: What Is It? 

The textbook definition of total and permanent disability insurance is that it will pay the insured a lump sum of money should one become permanently unable to continue working because of an injury. The money that is paid to the insured is meant to go toward medical bills, including personal rehabilitation costs, daily living expenses, and to help the person pay back any outstanding loans they may have.

What Does TPD Cover?

There may be slight differences between lenders in what TPD covers. In a nutshell, though, this type of insurance should be able to provide coverage for people who will permanently need to stop working in their usual occupation as a result of the incident.

What Coverage Should You Have?

Since people have varying needs when it comes to insurance, you should take a look at your specific financial situation and base the coverage you get from there. If you have any dependents, you should include them in the coverage you get when you get a TPD. The most important consideration you need to make is how much coverage you will need to cover the expenses that you will continue to incur, even if you are unable to continue working. Daily living expenses, medical bills, home modifications, and any outstanding debt, among other things, should all be added to your overall computation.

What Is the Difference Between TPD and Income Protection?

While there may be striking similarities between TPD insurance in income protection insurance coverage, the key difference lies with the benefit period. While income protection will provide coverage to the insured after they become unable to work after an accident, this type of insurance will not last for long. There will only be a finite benefit period that the insured will be covered. In contrast, TPD will offer coverage if you are permanently unable to return to work due to illness or injury.

For Insurance Advice Tailored to Your Needs, Contact Us Now! 

Now that you know the basics of TPD insurance, you are now able to make a decision on if this type of insurance may fit your needs or not. However, it is worth noting that this article only offers generalised information on TPD. Should you have any further inquiries regarding this type of insurance product, it is best to take these questions up with a financial advisor. 

To know more about tips in streamlining your insurances and achieving your financial goals, check out these posts:

If you need help making this decision, work with one of the life insurance advisors in Byron Bay! For your financial planning needs, contact Newcastle Financial Planning Group today!


DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Coastal Advice Port Macquarie and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.

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