Critical illnesses such as cancer and heart disease still have a big impact on the lives of those it affects. A significant part of this impact can often be financial. There are times where we wish we had a strategy in place, one that we hedge against the risk of financial losses. There are many different types of insurances in the market and the types of life insurance that will now be looked at – Total and Permanent Disability (TPD), Trauma and Income Replacement – is to help those affected to cope with the financial impact.
Why do I need insurance?
Sickness and injury are unpredictable and sometimes it can have significant impacts on you and your family. For instance, the impact of the sickness or injury can result in a person being unable to work on their own or any occupation ever again. For this reason, having an insurance can insure against the unfortunate situations and provide the support you might need, such as:
- pay off debts;
- provide for on-going costs of medical care and support.
- provide a continuing income stream so that lifestyle is maintained
Total and Permanent Disablement Insurance (TPD insurance)
Total and Permanent Disablement insurance (TPD insurance) is designed to provide a lump sum benefit to the life insured if they become totally and permanently disabled. All policies provide a payment to the life insured if they are unlikely to ever return to work under either of two conditions:
- they are either totally or permanently disabled according to their policy’s definition of TPD; OR
- they have met a loss of sight/limb condition.
In the meantime, there are two types of definitions with TPD insurance, own occupation and any occupation:
The first definition is the superior definition and is called ‘own occupation’ TPD. Under this definition, the benefit is paid if the life insured is unlikely to perform the duties of their own occupation ever again. Premiums for the own occupation definition are 40% to 50% higher, but a successful claim is much more likely.
The second definition is ‘any occupation’ TPD. Under this definition, the benefit is paid if it is unlikely that the life insured can work in any occupation for which they are reasonably suited by education, training or experience.
The ‘own occupation’ definition is generally only available for professional, white collar workers and light blue collar (trade and light manual) workers. A clean medical history may also be required.
Want to know more about insurance? Bart Healy, insurance expert is on our show this week talking about insurance, in particular income insurance. Stay tuned to TOMORROW episode at 6 PM Channel 31 (Digital 44).
If you have any questions regarding insurance, don’t hesitate to give us a call on 1800 877 741, or send an email to firstname.lastname@example.org.