TPD, or total and permanent disability insurance, is the insurance cover you take out to protect yourself against the adverse financial effects that could occur if you were to become permanently disabled. It will keep your finances secure should you never be able to take part in your particular line of work ever again because of a disability having occurred. It will enable you to keep paying your bills under such circumstances and if found necessary, allow you to hire additional help such as that of a private nurse.

Total and Permanent Disability Insurance can be added to Your Existing Life Insurance Policy

This type of protection can be obtained from life insurance companies as an add on to your existing life insurance policy. In effect it is an insurance cover that will pay the full benefit to you, the insured person, while you are still living and not to your beneficiaries after you have died. Unlike trauma insurance where the proceeds are paid as a lump sum only, TPD payments can be paid in instalments or as a lump sum payment. The amount paid however wil be taken off the life insured amount on your life insurance policy therefore decreasing your death benefit amount. The benefit of TPD is its ability to stop your medical condition from making you a financial burden on your family.

Specific Definitions of Illnesses and Injury Events Differ Between Insurance Companies

The type of medical conditions you could expect to be covered for with a total and permanent disability insurance cover would be the loss of limbs, blindness or any other ailment that would cause you to be unable to carry out everyday tasks. The specific definition of what type of ailments you are covered for differ from one insurance provider to another. It is up to you to familiarise yourself with the type of cover before you sign up for the insurance.

Benefits Derived From Having TPD Insurance Cover

It is the type of living insurance that can assist you in making the necessary lifestyle changes you will find necessary to fit in with your changed circumstances should you find yourself in the position to make a claim. It can help you in the following ways:

• By providing an income. This  will be necessary if you are no longer able to work in your own right.
• Paying off any debts you might have at the time. By doing this you will be freeing up your cash flow and  making it easier to live. These debts could include such things as a mortgage, motor car or personal loan.
• Help pay the costs of hiring a private nurse. You may need such person to care for you or you may need extra medical expenses that are not covered by Medicare or your private health insurance.
• Pay for any necessary lifestyle changes. Renovations to your home such as hand rails, ramps and a new bathroom incorporating a lift.

How Much Cover is Needed

Everybody situation is different therefore there is no hard and fast rule as to how much TPD cover you will need. The best way to determine how much cover you will personally need can be ascertained by taking into account you own situation independently with such things as:

• Your income both now as well as your anticipated income in the future. This is important as your income will have to be replaced if you are no longer able to provide it. You will have to decide whether you will need enough cover paid out in a lump sum to invest in order to create an income or treat your benefit payments as replacement income.

• The number of dependants you have, or will have. The number of dependants you have or are likely to have responsibility for in the future is an important factor as total and permanent disability will most likely mean that you will be no longer able to carry out your obligations to these individuals. By taking out TPD insurance you will be able to continue your financial obligations in this regard but you will  have to know how many people are involved and what the cost of keeping them will be.
• The amount of money you owe. You may wish to pay out your mortgage, motor car, or any other debts. These will have to be accounted for in determining the amount of cover you will need.
• Assets are also important. If you own other property or shares you might consider selling them off in order to create liquid funds to pay off debts. This will give you a better cash flow and create a situation where you can cut back on the amount of insurance you will need to achieve the same end.
• Superannuation. If you have superannuation you should check the amount of TPD cover you are already covered for in the fund. If you feel it is insufficient you should be able to add to it at a cheaper rate than you could from outside the fund.

Whatever you decide you will be well served by engaging the services of a qualified financial advisor who will be able to put you on the right track to get the best and most economical cover available.