TPD cover provides a lump-sum payment if you become disabled and you are unable to work again. TPD plans will also provide payment for other seriously disabling situations, such as loss of sight. You should check the relevant PDS to see if you are covered.
A huge emotional strain is placed on a family to provide support to someone who may not be able to work again and requires fulltime care. Money is the last thing you would want to think about when faced with a lifelong disability.
Your insurance premium will be based on a range of factors such as your age, smoking status, gender, occupation, health and the amount of cover you choose. Your financial adviser will develop a plan to suit your budget.
An important feature of TPD is the ability to take out cover for your ‘own occupation’ or ‘any occupation’. With ‘own occupation’ cover you are determined to be totally and permanently disabled when you are no longer able to work in your regular job, even if you might be able to work in another occupation. You might consider this cover if you work in a specialised field. You also pay an increased premium to take out ‘own occupation’ TPD cover. With ‘any occupation’ cover you are determined to be totally and permanently disabled when you are no longer able to work in any occupation.
The disability rate increases steadily with age, with younger people less likely to report a disability than older people. Of those aged between 25 and 34, 8% were affected by disability, compared with 40% of those aged between 65 and 69 and 86% of those aged 90 years and over.1
You may have Life and TPD cover through your super fund. If so, make sure you have enough cover and that the type of cover is appropriate for you. Talk to your financial adviser about whether having your Life and TPD cover in super is the right option for you. There are some things to think about like tax considerations, and how and when benefits will be paid.
1 Australian Bureau of Statistics. Disability, Ageing and Carers, Australia: First Results, 2015. Table 2.3 All persons, disability status, by age and sex–2015, proportion of persons.
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