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Total and permanent disability (TPD) insurance protects you if you become permanently disabled and can no longer work.
While income protection insurance provides you with a sustained income if you're unable to work due to illness or injury, TPD insurance comes in the form of a lump sum payment, helping you take care of any debt you have as well as any immediate medical expenses.
Make sure you check whether the TPD cover is offered as a standalone product or an add on. If it's an add on, it means you will need to attach it to a life insurance policy. You can run a quote from any of our partner brands to check policy structures and get price breakdowns for TPD insurance. Select Get Quote to get started.
TPD insurance is protection for 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 might struggle to pay if you can't work and earn an income.
You pay your insurer a monthly or annual fee and in return, receive one large payment from it if you become permanently disabled and are unable to work. There are two main types of TPD insurance:
If you take out "any occupation" TPD cover, you get a payout if you can no longer return to any form of work related to your experience. "Own occupation" TPD insurance pays a lump sum if you can no longer return to your usual occupation.
An adviser can help you find cover from trusted life insurance brands.
1. A situation forces you to stop working.
Common examples include loss of sight or hearing and mental illness.
2. Your insurer assesses your claim.
It'll look at your injury or illness and confirm that you can't return to work.
3. Receive your benefit payment.
In addiction to your income, payment can help towards debt and medical expenses.
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.
$500,000 cover | Male | Female |
---|---|---|
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 cover | Male | Female |
---|---|---|
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 |
$500,000 cover | Male | Female |
---|---|---|
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 cover | Male | Female |
---|---|---|
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.com.au's quoting engine. Details of the quote were for a 35-year-old non-smoker.
*Average prices were taken from a sample quote of all policies available on finder.com.au's quoting engine. Details of the quote were for a 35-year-old non-smoker.
In Australia you can either get TPD insurance directly with an insurer or with the help of an adviser (retail insurers). We've compared TPD insurers based on market share.
Direct insurers | Market share by annual premium | Retail insurers | Market share by annual premium |
---|---|---|---|
AIA | 1.0% | AIA | 7.3% |
Allianz | 5.0% | Allianz | n/a |
AMP | 2.8% | AMP | 20.1% |
ClearView | 2.5% | ClearView | 2.1% |
CMLA | 5.3% | CMLA | 4.8% |
Hallmark | n/a | Hallmark | n/a |
Hannover Re | 11.1% | Hannover Re | n/a |
HCF | 2.5% | HCF | n/a |
MetLife | 0.5% | MetLife | 0.1% |
MLC | 0.0% | MLC | 12.7% |
NobleOak | 6.9% | NobleOak | 0.1% |
OnePath | 3.9% | OnePath | 13.9% |
QBE / Integrity | n/a | QBE / Integrity | n/a |
Qinsure | n/a | Qinsure | n/a |
St Andrews | 0.2% | St Andrews | n/a |
Suncorp / Asteron | 0.5% | Suncorp / Asteron | 8.9% |
Swiss Re | 46.2% | Swiss Re | n/a |
TAL | 11.0% | TAL | 9.0% |
Westpac | 0.7% | Westpac | 12.9% |
Zurich | 0.0% | Zurich | 8.2% |
Some TPD insurance benefits and features you should be aware of and might want to include:
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.
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.
TPD is defined as being totally and permanently disabled and unable to work as a result. Insurers further define their interpretation of TPD inside insurance policies. These definitions impact when a TPD claim will be paid out. The different definitions of TPD are as follows:
Any occupation.
This pays a lump sum if you become permanently disabled and are unable to work in your own occupation or any occupation to which you are suited by education, training or experience.
Own occupation.
This pays a lump sum if you become permanently disabled and are unable to work in your own occupation. This is the most expensive form of TPD insurance because the terms are very specific and a payout is more likely.
Activities of daily living
This ignores your occupation and pays a lump sum if you become permanently disabled and are unable to independently conduct two or more of the five listed Activities of Daily Living (e.g. eating, bathing, dressing etc.) Given that you would have to be severely disabled to qualify, this is the hardest form of TPD insurance to claim on.
When taking out TPD insurance and calculating the cover you need, you should consider:
Find out if TPD insurance in super is right for you.
See how Firths can help you get TPD cover even if you didn’t purchase a policy.
Any occupation cover and own occupation cover are two types of cover that apply to Total and Permanent Disability Insurance (TPD) and Income Protection Insurance
Find out your disability cover options here with our overview and comparison.
What’s the difference between TPD and Income Protection Insurance? Why do they work so well together? Why are they less effective through superannuation? Find the answers to these questions and more in our guide to the insurance that protects your lifestyle in the face of illness or injury.
Is TPD insurance tax-deductible? Do I need to pay tax if I receive a payout? Find out how TPD insurance is treated.
If you need to make a claim on your TPD insurance, follow these steps to ensure you have the best chance of making a successful claim.
Find out what exactly TPD insurance covers and how to determine an appropriate level of cover to give adequate protection in the event of disablement.
How much on average do lawyers charge for a successful TPD outcome, worth about $200,000?
Hi Jim,
Thanks for getting in touch.
Not actually sure though how much the lawyers will charge for a successful TPD outcome as that would entirely depend on the level of service they provide. You’d be best to confirm this directly with the lawyer you go with and confirm their up-front legal fees.
Cheers,
May
Can a TPD payout be used to cover medical expenses in a private hospital when the person is in pain and the public waiting list is 18 months long?
Hello Jill,
Thank you for your comment. :)
Most TPD insurers have a 3-12 months waiting period and pre-existing exclusions set (e.g. suicide or attempted suicide related injury). As long as you have fully disclosed the conditions, meet the waiting period and the “definition” of the cover you took, it may be qualified for a claim as most TPD products are fully underwritten. Meaning, all terms and other “special clauses” should have been agreed on before it was issued to you.
You may want to speak to your insurer or insurance agent about this matter. Also, you can refer to the Product Disclosure Statement of your actual insurer’s product for details.
Hope this helps.
Cheers,
Jonathan