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TPD insurance, or total and permanent disablement insurance, provides a lump sum benefit payment if you become totally and permanently disabled and are unable to work. This type of cover is designed to help cover your mortgage repayments, pay for medical expenses resulting from your injury, and provide ongoing financial support for your family.
What is 'any occupation' TPD insurance?
Any Occupation TPD Insurance will provide a benefit payment if you become disabled and are unable to return to any sort work all together to work (not just your previous occupation).
What other types of TPD insurance are there?
There are five different types of TPD insurance cover available to applicants: Any Occupation, Own Occupation, Home Duties, Activities of Daily Living and Loss of Independent Existence.
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Any occupation TPD Insurance definition
Due to the different types of TPD insurance cover available, you’re able to choose the definition of disability that suits you best. As mentioned above, Any Occupation TPD Insurance means you will be eligible for cover if you become disabled and a doctor believes you will be unable to ever be able to return to the workforce in any occupation.
How is Any Occupation usually defined?
For the purposes of this definition, any occupation is classed as a job that you would be ordinarily suited to thanks to your education, experience or qualifications.
Don't confused with 'Own Occupation'
Any Occupation is not to be confused with Own Occupation TPD Cover, which means you will be eligible for cover if a doctor believes your disability will prevent you from ever being able to return to your own occupation. Under this cover, your own occupation is defined as being the job you were working in when you became disabled.
Occupation Vs Own Occupation TPD Insurance
Some people can become confused by the difference between Any Occupation and Own Occupation TPD Insurance cover, but the varying pros and cons of each type of cover can be easily explained.
|Am I covered if I can't return to work at all?|
|Am I covered if I can't return my own job but I can return other types of work?|
|Which type is more expensive?||More expensive||Less expensive|
|What occupation's is this available to?||Limited amount||Most occupations|
The key difference
One example often used to help explain the difference between Any Occupation and Own Occupation cover is that of a surgeon who loses his hand and is no longer able to perform surgery. Under the Own Occupation definition, the surgeon would receive a lump sum payment. Under Any Occupation TPD Insurance cover, however, the insurance company may decide the surgeon would still be able to find other suitable work and would not pay the claim.
What choice is right for me?
This comes down to personal preference and circumstances.
Own Occupation TPD Insurance is generally considered to offer more tailored coverage, and with Own Occupation cover you have a much greater chance of receiving a benefit payment if you become disabled. However, Own Occupation cover is restricted to a limited amount of occupation types, so it is only suited to those working in certain professions. Any Occupation TPD cover, meanwhile, is available for a wide range of jobs. Own Occupation TPD Insurance cover is more expensive to that of Any Occupation as there is an increased likelihood of a benefit payment being provided.
Any occupation partial payments benefit
Some Any Occupation insurance policies will also offer a partial payments benefit as part of their cover. This partial payment usually constitutes 25 per cent of the sum insured and will be paid if you suffer from the permanent loss or loss of use of one arm, one leg, or the loss of sight in one eye.
If you eventually become totally and permanently disabled, the remaining balance of the sum insured will typically be paid out to you at a later date.
The benefit can be used to cover whatever costs you desire, but can be a great help to take care of things like mortgage and debt repayments, medical expenses, and any home modifications that may need to be made to help accommodate your disability. Alternatively, the partial payments benefit can also act as an income stream for a period of time.
Can I get Any Occupation Insurance through my super?
Any Occupation TPD Insurance cover can also be taken out through your superannuation fund. However, there are three main factors that need to be looked at closely before making a decision on whether you should take out TPD cover through your super fund:
- Requirements to contribute. One of the benefits of holding TPD cover through your super is that insurance premiums can be paid straight from your super balance or from account contributions made by your employer. This makes it easier to keep money in your wallet and available for everyday expenses. On the other hand, you can pay for your insurance premiums by making additional contributions into your super account—either by salary sacrificing or making extra tax-deductible contributions. In order to have TPD cover through superannuation, you’d therefore need to either have an accumulating benefit or have regular employer contributions made on your behalf. You also need to be wary of exceeding any contribution limits imposed on your super.
- Taxation of premiums. Premiums for TPD insurance policies that are held as standalone cover outside of superannuation are not tax-deductible. However, as of 1 July 2011, Any Occupation TPD insurance premiums are fully tax-deductible to a complying super fund if the policy definition meets the conditions of a “disability super benefit”. These conditions stipulate that you must suffer from a physical or mental disability, you must be unlikely to ever work again in an occupation suited to your education and experience, and you must be able to provide evidence of this which is certified by two medical practitioners.
- Payment of benefit. If your TPD cover is held inside super, special rules govern your ability to access any benefits paid into your account. First of all, you’ll obviously need to satisfy the TPD definition used by your insurer in order to qualify for the benefit. Secondly, you’ll need to meet the permanent incapacity definition (which involves satisfying the super fund trustee that you are unlikely to engage in gainful employment) or one other condition of release specified under the laws governing superannuation in order to access your benefit. You’ll also need to meet the “disability super benefit” conditions mentioned above, and remember that any benefit payment you receive may be taxed under the superannuation benefits payment rules.
Any Occupation Income Protection Insurance
Income protection insurance is a type of cover more and more Australians are taking out in these uncertain times, but many are unsure about whether they should choose Any Occupation or Own Occupation income protection cover. Some of the features offered by income protection include:
- Better level of cover. While Any Occupation policies attract cheaper premiums, Own Occupation policies offer a better level of cover for most people. Insuring yourself with Own Occupation income protection offers a greater amount of earnings protection and also greatly reduces the risk of an insurer turning down your claim.
- Own occupation for office workers. If you work in an office, chances are that you’ll easily be able to find Own Occupation income protection cover. Even if you’re not in an office job, there’s still a good chance you’ll be able to find Own Occupation cover from some insurers.
- Difficulty for high-risk workers. However, many insurers will refuse to offer this type of insurance to people who work in extremely risky or hazardous occupations, such as professional sports people or even those who work outdoors and at heights. If you’ve got a risky job and no insurer will offer you Own Occupation cover, you may have to take out cover under an Any Occupation definition or a definition based on your work tasks.
- Combination of definitions. It’s also important to point out that some policies will actually combine the Own Occupation and Any Occupation definitions. For example, you might receive benefits for the first 24 months if you’re unable to perform your own occupation, but from that period on you’ll only be paid if you cannot perform any occupation.
Apply for Any Occupation TPD Insurance
Whether you’re shopping for Any Occupation TPD Insurance, income protection cover or insurance of any type, make sure to compare your options and seek expert advice to find the right level of cover for your situation. An insurance consultant can help you assess what type of TPD cover is most suitable for your situation and compare the different options available on the market to find a suitable option.