What is TPD Insurance?
When an illness or injury permanently prevents you from working in your occupation or any occupation, Total and Permanent Disability Cover (TPD) can provide a lump sum benefit, which can help you reduce financial stress, maintain your quality of life, pay off your mortgage, fund your children's education as well as out-of-pocket medical expenses and retirement expenses.
Who needs TPD insurance?
People with mortgage, dependant, or income, tend to have the following wealth protection needs in the event of disabilities:
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To leave financial support for children, spouse, parents.
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To repay the mortgage to protect properties.
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To protect their business by ensuring a continuous flow of funds.
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To supplement cash flow gaps to cover essential living expenses.
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To compensate for income loss due to being unable to work because of illness.
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To pay for lost income due to inability to work.
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To access health and consumer benefits as an insurance member, saving on costs.
3 Types of TPD insurance
It’s important to note that there are three different types of TPD insurance –
Own Occupation, Any Occupation TPD insurance and Activities of Daily Living (ADL).
These have significantly different TPD insurance meaning.
Own Occupation
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Own Occupation pays out if you make a claim because you can't work permanently in the occupation you’re working in at the time of your claim.
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TPD (any occupation) cannot be 100% funded by your superannuation, which means it might incur a small part of out-of pocket cost. For example: Out of $500 of TPD yearly premium, you will need to pay $100 out of pocket and the rest of $400 paid via your superannuation.
Any Occupation
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Any Occupation pays out if you make a claim because you can't work permanently in any occupation that matches for your experience, education or training.
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TPD (any occupation) can be 100% funded by your superannuation, which means you can avoid any out-of-pocket cost.
Activities of Daily Living (ADL)
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Activities of Daily Living (ADL) pays out if you unable to perform at least two of six activities of daily living. Some of these include: feeding yourself & bathing yourself.
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ADL can be 100% funded by your superannuation, which means you can avoid any out-of-pocket cost.
Real Case Screnario
What does any occupation and own occupation mean?
James is a dentist. He badly injures his arm in an accident and is unable to work as a dentist again.
Own Occupation | Any Occupation |
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James can claim on an Own Occupation TPD policy. He was working as a dentist when he was injured and cannot return to this job. | James can only claim on an Any Occupation TPD policy if he cannot work in any occupation he has experience, education, or training in. |
James used to work as a dental assistant before becoming a dentist. His Any Occupation claim may be denied if he could still work as an assistant.
The main difference here is in an Any Occupation policy, insurers may decide you're still fit to work based on your education, training and experience.
Essentially, you have a much higher barrier to claiming under an Any Occupation policy.
Can I get TPD through my super?
Yes, many superannuation funds automatically include TPD coverage.
However, It's important to note that TPD insurance provided by super funds is typically limited Any Occupation coverage, as Own Occupation coverage is not available through superannuation alone.
Additionally, some super funds may require you to undergo an Activities of Daily Living (ADL) assessment to evaluate the severity of your disability. This means they may only provide payout if you are unable to perform basic tasks such as feeding yourself, moving independently, or maintaining personal hygiene.
The level of TPD coverage in superannuation can vary significantly, leading the Australian Securities and Investments Commission (ASIC) to issue warnings about the large discrepancies between default TPD coverage and associated costs in super. For some individuals, the TPD coverage offered by their super fund may be sufficient. However, it's essential to take the time to review your superannuation cover, understand what it includes, and determine how much of your retirement savings are allocated to it.
If you feel that your superannuation TPD coverage is inadequate but still want TPD protection, our team can assist you in comparing different policies.
How to customize your TPD cover?
1. Decide which TPD option you would like to insure yourself with
2. Calculate the sum assured
How much do you need to repay the mortgage? Are there other debts? How much income needs to be protected? How much does it cost to educate children? How much is the necessary living expenses?
You can also refer to the following sum assured calculators:
2.Confirm Premium Coverage
What is your budget to fund your protection in place?
3. Find the Balance Point
Are you comfortable with both the cover amount and premium level?
Key Benefits
Disability Benefits
In the event of a total or partial disability accident, the insured will receive full or partial payment of the sum insured.
24/7 Global Cover
You will be protected anywhere in the world at any time with the absolute confidence and peace of mind.
Child Cover
Child cover is available to protect your family income when you stop working and while taking care of your child in the unexpected events.
Interim Cover
This put some temporary accident cover in place as soon as you apply for cover.
Your Trusted Insurance Partner
Hippo Insurance has been delivering top-notch insurance services across Australia for more than 10 years. Our team of specialists have an accumulated experience of more than 20 years in the insurance and finance industry, protecting over 1,000 families and business.
We value our clients' trust and time. Especially, we treat them as individuals, not just numbers. Our team of experts is dedicated to providing you with the best insurance coverage at an affordable price.
We understand that every individual or business has unique needs, which why we empower you to tailor your own protection to your specific requirements.