Life does not always turn out the way we plan or hope for. Illness and accidents are a reality – and if serious, could leave you unable to work.
How would you, your family or your business cope if you could no longer earn an income?
How would you manage if you needed permanent care?
What is Total & Permanent Disability (TPD) Cover?
TPD cover presents you with a nominated tax-free amount in the form of a lump sum payment if you become disabled to the extent that you are unable to work.
2.6 million Australians aged under 65 are living with a physical disability.i
Australians suffer around 60,000 strokes per year or close to one stroke every 10 minutes.ii
About 88% of stroke survivors live at home and most have a disability.iii
Over one million Australians need assistance with core activities (such as communication, transport and self-care) due to severe disability.iv
Count how many numbers of years you have until retirement. Now, multiply this number by how much you earn per annum on an average.
In the event of a permanent disability, this is the amount of money you could no longer provide for your family. Yet, many Australians do not seek protection because of some common misconceptions until an accident or illness occurs.
“I’ll receive a disability pension”
The disability pension only provides around 20% of the average Australian wage.v
“My TPD Cover in my super fund is enough”
TPD cover inside super only represents 20% of the cover required.vi
“It doesn’t matter; I’m not the main income earner”
Child care and home help provided by a ‘stay-at-home’ spouse could be worth more than $75,000 per year.vii
What do the payments protect?
Sure, you can get through on your savings for a while. But facing permanent disability would leave only a few options for you and your family to manage your future lifestyle.
A lump sum payment is critical to help meet the following expenses:
Mortgage repayments: Regardless of what happens, there will be funds available to protect the family home.
Day-to-day expenses: Everyday bills can build up fast. Without being able to earn an income, a lump sum payment can help cover everyday living expenses such as food, utility payments, clothing and schooling.
Ongoing care: Employing a full-time caregiver is necessary and very expensive. A lump sum payment can help with servicing the cost of care as well as help with ongoing rehabilitation.
Medical bills: This lump sum can fund medical treatments that your health insurance is unlikely to fully cover.
Home modifications: In the event of a total permanent disability, more than likely you need modifications to your house and work environment.
What are the cover features?
These are just some of the features you can expect to have with your TPD Cover:
A choice of disability definitions: You can choose the one that best suits your needs from ‘Own occupation’, ‘Any occupation’ or ‘Activities of Daily Living’. Our financial advisers can provide information on each of these options.
Flexible packaging options: For example, combine TPD and Life Cover to broaden your protection for a more cost-effective option.
Additional benefits: The Guaranteed Future Insurability benefit allows you to increase your sum insured without having to providing extra medical evidence.
What are the cover options?
Below are just a few options you can expect with your TPD Cover:
‘Standalone’ or ‘Linked’:
>In the event of a claim, ’standalone’ cover will not affect the level of any other covers.
>When ‘linked’, a TPD claim payment will result in an equivalent reduction in the linked Life Cover (this is the more cost-effective option than mentioned above).
Inside or outside super: You may be able to structure your TPD Cover inside super and pay premiums using pre-tax dollars. There are often restrictions with this structure, so it’s important you talk to one of our financial advisers.
Choice of premium options:
>‘Stepped’ premiums increase on a yearly basis in line with your age.
>‘Level’ premiums remain the same until age 65 (at this point, they then convert to stepped).
Total & Permanent Disability (TPD)
Causes of Claim
How do i get protected?
One of our financial advisers can help tailor the right level of cover for your needs.
Save yourself one less worry and contact one of our agents today or request a quote from us.
i AIHW (2008) Australia’s health 2008, Cat. no. AUS 99, Canberra
ii Stroke Foundation (2011) Facts, Figures and Statistics, www.strokefoundation.com.au/facts-figures-and-stats, viewed 12 March 2012
iii Stroke Foundation (2011) Facts, Figures and Statistics, www.strokefoundation.com.au/facts-figures-and-stats, viewed 12 March 2012
iv AIHW (2008) Australia’s health 2008, Cat. no. AUS 99, Canberra
v Disability pension at 20 September 2009 is $528.50 per fortnight for a disabled spouse with children - Centrelink.gov.au.
$1,223.30 weekly ordinary times earnings, Australian Bureau of Statistics, November 2009.
vi IFSA (2005) A Nation Exposed: Investigating the Issue of Underinsurance in Australia, Research study commissioned by
IFSA and conducted by Rice Walker Actuaries and TNS Australia, Sydney
vii IFSA (5 October 2005) Australian mothers – undervalued and underinsured, Media release, Sydney