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How much TPD insurance should I have?

TPD payouts vary a lot – limits can range from $50,000 to $5m. In general, you'll need more if you're younger. Try our calculator and figure out how much you might need.

Our life insurance calculator can help you work out how much total and permanent disability (TPD) insurance you may roughly need. For TPD insurance, select 'A lump sum payment if you are permanently unable to work again' and fill out the short questionnaire.

Try our TPD insurance calculator

So, how much TPD insurance do I need?

As with life insurance, determining how much TPD cover to take out requires a close look at your financial situation. You'll want to assess how your life, and those of your dependants, could be affected in the event of you becoming totally and permanently disabled.

Life insurance
A key first step in this process is writing down all of your current financial obligations.

10 common expenses TPD can help cover

  • Mortgage/rent repayments
  • Personal debt i.e. credit card debt, car loan, personal loans
  • Future funding goals, like your children's education
  • Rehabilitation expenses
  • Professional nursing care
  • Groceries
  • Necessary modifications to home (addition of ramps, lift access, handrails etc)
  • Other medical costs. Don't forget to factor in any private health cover costs.
  • Other day-to-day living expenses
  • Any expenses linked to your retirement plans

Essentially, you'll want to work out what costs would be incurred if your income stream was suddenly removed. There are self-assessment calculators available online that can help with this process.

Life insurance
The next step to take is to calculate other sources of finances you'd have after you stop working. Do you have any savings or investments you could rely on? Would you get any other payouts, such as from an income protection policy? It's worth checking to see if you have any benefits within your super account too.

The difference between what you'd have and how much you'll need to fund your financial obligations and lifestyle can help to guide you in how much TPD insurance you may require.

When you're ready, compare TPD insurance quotes

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Name Product Maximum Cover Minimum Cover Maximum Entry Age Expiry Age Stand alone or Add on policy hide
NobleOak TPD Insurance
No minimum
Policy add-on
Get fully underwritten TPD cover that can be shaped in a way that takes into account your job and other circumstances. The $5 million benefit limit is – alongside RAC – the highest sum on Finder.
Medibank TPD Insurance
Policy add-on
Secure up to $1.5 million in TPD cover by choosing Medibank. This was more than 7 other providers (out of 14) we reviewed. Medibank health members can score 10% off their life insurance premiums.
ahm TPD Insurance
Policy add-on
With ahm, you can add up to $1 million in TPD insurance to your policy. You can buy online and there’s no medical exam. Keep in mind that Medibank offers an extra $500k – worth considering if your needs are greater.
RAC TPD Insurance
No minimum
Policy add-on
When you purchase RAC TPD Insurance, WA residents receive complimentary RAC membership which includes access to discounts on fuel, savings on shopping, entertainment and more. T&Cs at
TAL TPD Insurance
Not stated
Standalone or Policy add-on
Choose up to $3 million in coverage. If you’re building a policy with TAL, it’s good to know there are a range of perks included with your life insurance. Examples include a counselling benefit and premium suspension cover. Plus, the option to add coverage for your kids.

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If I already have life insurance, should I still consider TPD insurance cover?

In many cases, yes.

While standalone life cover can provide support in the event of the policyholder's death or diagnosis of a terminal illness, it won't automatically cover a policyholder who becomes permanently disabled.

The impacts of suffering total disablement and not being able to work again can be devastating. The financial impact is also severe. If you're young, a large lum sum payout from TPD could support you for decades.

Some examples of illnesses or injuries that could fall under your TPD cover include:

  • Acquired brain injuries
  • Back or shoulder injuries
  • Cancer
  • Chronic pain
  • Degenerative diseases
  • Mental illness

TPD insurance could help you keep on top of your current debt, living expenses into the future and any rehabilitation and ongoing treatment that you might require, the costs of which can run into many thousands of dollars.

Can I purchase TPD Insurance through life cover?

A number of life insurers do offer TPD as part of their life cover policies, but it's usually listed as an optional extra. This means you'd need to opt-in, by paying an added premium, in order to be covered.

It's important to review each Product Disclosure Statement (PDS) on any policy you compare before you lodge an application. Check whether a life cover benefit will be paid if there has already been a claim for TPD. In some instances, the benefit will not be paid or the policy will be cancelled.

To work around this, many policies will offer a 'buy-back' feature that reinstates the life cover that's been removed from the sum insured as the result of a TPD claim.

As an example, if you had $500,000 worth of life cover and $250,000 in TPD, if a claim is made the life cover sum insured would reduce to $250,000 in a linked policy. A buy-back feature will “top-up” this amount to $500,000 after 12 months of the claim being made.

The benefit of bundling the two cover types together is that it can be more cost-effective when it comes to paying premiums, and also makes the management of the two policies easier.

Papers with magnifying glass icon
Minimum and maximum limits
On the lower end of the scale, many insurers will have a minimum cover amount of $25,000-$100,000. At the higher end, you'll start to see maximum limits at $1,000,000-$2,000,000. That being said, NobleOak goes as high as $5,000,000.

The main types of TPD cover to understand

TPD policies generally come under two definitions. These are "own occupation" and "any occupation".

Own occupation: Benefit is payable if a certified doctor deems that it is unlikely for the policyholder to ever return to the occupation in their field.

Any occupation: Benefit payable if the policyholder is unable to perform the duties of their regular occupation and is unable to work in any other occupation that they may be suited to by education, training or further experience.

The distinction in the way your TPD cover is set up is an important one.

Financial adviser Brenton Tong told Finder that the type of TPD insurance that's sold within super funds, for example, was restricted to 'Any occupation'.

The chances of having a successful claim in this type of policy were "dramatically reduced", as opposed to direct policies that offer 'Own occupation' terms.

It's important that if you want full coverage for a broader range of events, you need to take out a fully underwritten TPD policy. Any policy that does the underwriting at claim or a later stage is opening you up to having your claim denied,

Brenton Tong, Managing Director of Financial Spectrum

Brenton Tong, Managing Director of Financial Spectrum

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