What is TPD Insurance?
TPD Insurance is a lump sum payment paid to cover the situation when a person is completely disabled and unable to work or earn an income. It is used to clear debts, provide funds for medical costs and annual income streams to ensure you maintain your quality of lifestyle. It is generally paid when you have been advised by a medical specialist that you will never work again. It is bad enough be temporarily unable to work, but the prospect of never working again is daunting.
Why do I need TPD Insurance?
Everyone thinks it won’t happen to them, however, have you considered how you would cope if you were unable to work again? This lump sum payment would assist you to pay your mortgage, and continue to honour your day-to-day financial commitments. What would happen to your family if you couldn’t bring in your current income? Being able to rely on an insurance payment at such a stressful time is a big relief for you and your loved ones. This insurance would cover you to:
- Pay off the mortgage and other debts
- Make home modifications or pay for rehabilitation
- Pay for nursing or other medical care
- Meet ongoing household expenses
- Pay for your children’s education.
What does it cost?
TPD Insurance cover has relatively low premiums when compares to other types of insurance, TPD premiums will vary according to:
- Your age (premiums may increase or cover decrease as you get older)
- Your gender (males attract higher TPD premiums due to higher risks)
- Whether or not you smoke, and
- Occupation (for example, a manual labourer pays higher premiums to an office worker due to higher risk)
TPD Insurance premiums are not tax deductible, however, the benefit payment is tax-free if paid to the injured person (non-superannuation).
