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TPD Insurance

TPD insurance can help cover the costs of rehabilitation, loan repayments and bills if you become permanently disabled and can no longer work.

What you need to know

  • Total and permanent disability (TPD) insurance can pay you a lump-sum (as high as $5 million) if you are no longer fit to work.
  • TPD is designed to cover you if you get sick or injured and become permanently disabled.
  • Finder research of 14 brands found 12 that offer TPD cover. It is an optional cover, meaning it must be added to a life insurance policy. Check out our life insurance glossary for more clarity.

What does TPD insurance cover?

TPD insurance covers you if you become totally and permanently disabled and are unable to work due to those disabilities. It is designed to help replace income, cover medical expenses and ongoing debts and bills that you'd struggle to pay if you were no longer able to work. It can cover you for:

Your own occupation

You can claim if you're unable to work again in the job you did before your disability. This cover is typically more expensive and only available outside super.

Any occupation.

This cover can be claimed if you can no longer work in any jobs suited to your education, training or experience. This cover is usually cheaper and less likely to pay out because say, for example, that you were previously a surgeon before disablement, you may still be able to work as a GP or doctor.

Compare TPD insurance in Australian life insurance policies

1 - 6 of 24
Name Product Maximum Cover Minimum Cover Maximum Entry Age Expiry Age Stand alone or Add on policy hide
TAL TPD Insurance
3,000,000
Not stated
61
65
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.
Medibank TPD Insurance
$1,500,000
$50,000
60
65
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.
NobleOak TPD Insurance
$5,000,000
No minimum
59
75
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.
ahm TPD Insurance
$1,000,000
$50,000
55
65
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 WA TPD Insurance
$5,000,000
No minimum
59
75
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 rac.com.au.
Real Insurance TPD Insurance
$1,000,000
$50,000
59
65
Policy add-on
Real Insurance offers up to $1 million in TPD cover. This is pretty competitive versus the market. You can also boost your cover by adding as much as $500k in critical illness insurance.
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piggy-bank
You may already have TPD
According to ASIC, about 9 million Australians hold TPD insurance and more than 4 in 5 (86%) do so through their super fund.

Finder survey: What prompted Australians of different ages to take out TPD insurance?

Response
None of the above31.87%
Having a baby24.18%
Buying a home18.68%
Starting a new job16.48%
Getting older (but not retiring)15.38%
Getting married12.09%
Starting my own business6.59%
Moving home2.2%
Buying a car1.1%
Retirement1.1%
Source: Finder survey by Pure Profile of 1110 Australians, December 2023

How does TPD insurance work?

Hands

1. A situation forces you to stop working

Common examples include loss of sight or hearing.

Check list

2. Your insurer assesses your claim

It'll look at your injury or illness and decide whether or not you can return to work.

Dollar sign

3. Receive your lump sum payment

The payment is designed to cover lost income, help pay off debt and potentially allow you to adapt your home to your needs.

How much does TPD insurance cost?

The average cost of TPD insurance is $15.29 per month. However, the fee you pay will depend on factors such as your age, gender, occupation, lifestyle choices and health. If you're a "blue collar worker", your premiums are typically a little more than "white collar workers" because your job generally involves more risk. Similarly, women typically qualify for lower premiums because they live longer than men.

TPD insurance costs will also depend on how big a TPD benefit you need. For instance, someone looking for a $500,000 lump sum will pay a larger fee (premium) than someone with a $200,000 payout agreement.

white collar worker

TPD insurance costs: White collar worker

$500,000 coverMaleFemale
Lowest costing policy$21.42 per month$21.19 per month
Medium costing policy$26.89 per month$26.89 per month
Highest costing policy$29.12 per month$29.12 per month
AVERAGE$25.81 per month$25.73 per month
$200,000 coverMaleFemale
Lowest costing policy$10.16 per month$10.03 per month
Medium costing policy$16.86 per month$16.84 per month
Highest costing policy$18.85 per month$18.85 per month
AVERAGE$15.29 per month$15.24 per month

blue collar worker

TPD insurance costs: Blue collar worker

$500,000 coverMaleFemale
Lowest costing policy$35.98 per month$31.78 per month
Medium costing policy$40.37 per month$40.37 per month
Highest costing policy$55.97 per month$55.80 per month
AVERAGE$44.11 per month$42.65 per month
$200,000 coverMaleFemale
Lowest costing policy$16.26 per month$15.04 per month
Medium costing policy$23.68 per month$23.68 per month
Highest costing policy$30.64 per month$30.34 per month
AVERAGE$23.53 per month$23.02 per month

Average prices were taken from a sample quote of all policies available on Finder's quoting engine. Details of the quote were for a 35-year-old non-smoker.

What are the benefits of TPD insurance?

Some TPD insurance benefits and features you should be aware of include:

  • Total disablement benefit. This is the benefit that's paid if you're disabled due to an injury or illness and are unable to perform work duties.
  • Partial disability benefit. This is the amount that is payable in the event of partial disablement, for example, loss of 1 arm, 1 leg or sight in 1 eye.
  • Buyback option. If your TPD cover is part of your life insurance, when a TPD claim is paid, the amount will be deducted from your life cover amount – a buyback option lets you reinstate that amount.
  • Death benefit. A benefit amount may be payable in the event of your death, even if your TPD cover is a standalone policy.
  • Loss of independence feature. In some cases the lump sum payment available with TPD insurance can convert to a loss of independence payout, based on the insured's ability to care for themselves.
  • Guaranteed future insurability. This feature allows you to increase the coverage of your policy during important life events, such as marriage, children or mortgage, without needing to undergo another medical examination, even if your health situation has changed.
  • Indexation benefit. Sum insured will increase annually in line with the Consumer Price Index (CPI) to keep up with inflation.
  • Premium freeze option. This option allows you to choose to retain your current annual premium under a stepped style when you reach a certain age and it will reduce the insured amount gradually.

Is TPD insurance included in my super fund?

Yes, it often is. However, it's not available with every super fund so it depends on which one your employer uses. If you want to check the level of cover provided by your super fund, you can look at your member statement or contact your super fund directly.

While TPD insurance inside super is usually cheaper than standalone TPD cover, you often get what you pay for. TPD cover inside super can't tailor a policy to your personal needs so it more than likely won't be able to cover all outstanding debts if you do become permanently disabled.

Pros and cons of TPD insurance inside super

TPD cover is sometimes included in the superannuation you receive from your employer. However, there are a few pros and cons of getting TPD insurance inside super.

Pros

Cons

  • It eats into your retirement savings.
  • There's a tougher, and often more drawn out, approval process for claims.
  • You can't get "own occupation" cover, which can restrict your ability to make a successful claim.

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Life insurance glossary: Key terms to know

A rundown of the tricky definitions for life insurance. Plus, what to look for when you're comparing.

Why compare life insurance with Finder?

  • You pay the same price as buying directly from the life insurer.

  • We're not owned by an insurer (unlike other comparison sites).

  • We've done 100+ hours of policy research to help you understand what you're comparing.

Or speak to a broker to help you find tailored cover

Frequently asked questions about TPD insurance

Written by

Gary Ross Hunter

Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full profile

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