How Much TPD Insurance Should I Have?

Looking for TPD insurance but just not sure what a suitable level of cover is? Learn the steps to get a clear estimate.

Total and Permanent Disablement is a form of insurance cover that offers protection for people that become completely disabled and are unable to work. The benefit paid is in the form of a lump sum. This can be given to the policyholder and their family to offer support as they are unable to work to their full capacity. Definitions of Total and Permanent Disablement can vary between providers so it is essential to be clear on what definition your policy falls under.

Enquire to get a clear TPD estimate for your situation

So how much TPD insurance do I need?

As with Life Cover, determining how much TPD cover to take out requires a close assessment of your personal financial situation and how your life could be affected in the event of becoming totally and permanently disabled. A key step in this process is actually writing down or creating a spreadsheet of all of your current financial obligations and consider what costs may be incurred if your income stream was to be removed. There are self-assessment calculators available online that can assist with this process.

9 expenses TPD can help cover

  • Mortgage/rental repayments
  • Personal debt i.e. credit card debt, car loan, personal loans
  • Day to day living expenses
  • Childrens education
  • Groceries
  • Rehabilitation
  • Professional nursing care
  • Necessary modifications to home (addition of ramps, lift access, hand rails etc)
  • Medical care

But I already have Life Cover, should I still consider TPD insurance cover?

While life cover can provide support in the event of the policyholders death or diagnosis of a terminal illness, what if the policyholder is to become disabled and not die? The impacts of suffering total disablement and not being able to work again can be truly devastating. TPD can help the insured keep on top of their current debt, living expenses into the future and any rehabilitation and ongoing treatment that they might require, the costs of which can easily run into the hundreds of thousands if not millions of dollars. Not having this cover in place can cause great financial strain on their surrounding family members and others they are close to.

Different definitions of Total and Permanent Disablement

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 that they have been trained in.

Any Occupation: Benefit payable if 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.

Can I purchase TPD Insurance through life cover?

Many life insurance companies now offer TPD feature within Life Cover policies. It is important for applicants to review the product disclosure statement before application to determine 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 Buy-Back feature which will reinstate the life cover that has 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 management of the two policies easier.

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Coverage is the amount of money that you will be paid in the event of a claim. An insurance consultant can help you determine an appropriate amount. Calculator
Provides a lump sum payment if you become totally and permanently disabled and are unable to return to work.
Provides a lump sum payment if you suffer a serious medical condition. Cover can be taken out for 40-60 medical conditions depending on the policy you choose.
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Compare TPD insurance quotes from these direct brands

Rates last updated April 30th, 2017
Product details Maximum cover Maximum Entry Age Cooling-off
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Choice of cover options and flexible premiums to suit budget. No lock-in contracts and fast application. $1,500,000 65 30 Get quoteMore info
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Get up to $1.5 million in life cover with no medical tests required. $1,500,000 69 30 Get quoteMore info
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Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ . $1,000,000 64 30 Get quoteMore info
Term Life Insurance
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A simple life insurance product that can offer up to $1,500,000 in a lump sum payment on death or diagnosis of terminal illness. $1,500,000 69 30 Get quoteMore info
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Get flexible life insurance up to the sum of $2,000,000. $2,000,000 59 21 Get quoteMore info
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Save 20% on NobleOak life insurance and pay no premium in the first month. $15,000,000 69 30 Get quoteMore info
Woolworths Life Insurance
Woolworths Life Insurance
Receive a discount of 10% on life insurance as a Woolworths Rewards Member. T's and C's apply. $1,500,000 65 30 Get quoteMore info

Richard Laycock

Richard is the senior insurance writer at and is on a mission to make insurance easier to understand.

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