Unfortunately, in life accidents happen.
Sometimes these accidents occur because of a serious medical condition (such as a stroke) or sometimes they happen as a result of car accidents and other traumatic events.
While most of the time we make a full recovery with the help of modern medicine, some people will end up end up being permanently disabled. This can change the person's life forever and that of his loved ones. Apart from the emotional effects, they can also suffer from the financial repercussions of disablement, especially if the disability prevents working again.
Such circumstances are often uncomfortable to talk about, but such terrible circumstances often lead to families not being able to pay hospital bills, mortgages/rent or other living expenses.
Total and Permanent Disability (TPD) insurance can help in such circumstances. As the name suggests, it provides you and your family with a lump sum benefits in case of an accident or illness that prevents you from earning income for the rest of your life.
The benefits received can be used for paying for expenses related to your condition, and to a certain extent, your household costs, including your utility bills and mortgage depending on the level of cover.
The level of the lump sum payout you will receive if Total and Permanent Disability insurance is triggered is determined when you take out a policy. The higher the benefit, the higher the premium that will be paid.
It is also common these days to take out TPD insurance linked to life insurance. Under this scenario, this scenario if your TPD lump sum is triggered your life insurance payment is reduced by the same amount. For example, if you have 500,000 in life insurance and 200,000 in TPD cover and TPD is triggered you will receive $200,000 immediately but your life insurance benefit would decrease to a $300,000 benefit. Most policies allow top up cover on your life insurance back to the previous level.
Although its name sounds straightforward enough, there is nothing straightforward about it when you go to the fine print. Different insurance companies have different ways of defining a few important aspects of the policy. For example, some include 'inability to earn', which means you need to be completely unable to earn any income to receive benefits. Thus, if you can still work on your computer or make calls, these might invalidate your claim.
It thus helps to be familiar with the policy before you sign up. To ensure that you are thoroughly informed on the terms and conditions of your TPD insurance, seek the help of a professional advisor first at Rate Detective. Your advisor will answer all your questions and supply you with all the information you need to make the right decision, including a comparison of the policies of the top 9 insurers in Australia.