TPD Insurance

Compare TPD insurance in Australian life insurance policies

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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.	Get Quote View details	Compare	loading Fetching your data...
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.	Get Quote View details	Compare	loading Fetching your data...
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.	Get Quote View details	Compare	loading Fetching your data...
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.	Get Quote View details	Compare	loading Fetching your data...
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.	Get Quote View details	Compare	loading Fetching your data...
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.	Get Quote View details	Compare	loading Fetching your data...

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

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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.

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.

How does TPD insurance work?

1. A situation forces you to stop working

Common examples include loss of sight or hearing.

2. Your insurer assesses your claim

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

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.

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.

• Factors that affect the cost of cover

  • Age. This is one of the most important factors to affect your premium. TPD insurance premiums are generally stepped, which means as you get older, your premium gets more expensive each year.
  • Gender. Women typically qualify for lower premiums because they live longer than men.
  • Occupation. Your job affects how much you'll pay for cover. The more dangerous the job the more you'll pay for TPD cover.
  • Family medical history. Insurers take into account a range of personal situations including your family's medical history.
  • Current health indicators. Your premiums can be affected by a range of health indicators including your blood pressure, cholesterol and red blood cells.
  • Lifestyle choices. If you smoke, drink or participate in high-risk activities on a regular basis, these factors are also taken into account when calculating your level of risk.

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.

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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.

Frequently asked questions about TPD insurance

• How much TPD insurance do I need?

  When determining how much TPD insurance you may need, a very rough rule of thumb is to take out coverage that is 10 times your annual salary. Some things you should consider include:

  • Your debts. If you have a mortgage, loan or any debt, you need to factor that into the amount of TPD cover you need.
  • Your level of health insurance. If your health insurance won't cover all the medical bills should you become permanently disabled, factor the costs into your TPD coverage.
  • Your super fund. If you have TPD insurance inside super, you might be able to receive a small payout through your super as well.
  • Family assistance. If you or your partner become disabled, who will take care of the home duties? You might need to consider budgeting for family assistance.
  • The level of coverage you want. Are you willing to sell your home and move somewhere cheaper? If not, then you want enough coverage to pay for all your debt repayments.

  However, everyone is different so you should consider your own circumstances and seek advice on the appropriate level of cover for you. A financial adviser could support your decision making if required.

• Can you add TPD insurance to my life insurance policy?

  Yes, you can add TPD cover onto your existing life insurance policy to have a more comprehensive coverage.

  If you're comparing a new deal, be sure to check and see if the TPD cover is offered as a standalone product or an add on.

• Should I bundle TPD insurance with life insurance?

  Figuring out whether you want TPD on its own or bundled with life insurance essentially boils down to the risk you're willing to take, based on your personal circumstances. It can make cover cheaper, and if you're sure to calculate your living expenses, it can still leave your loved ones with more than enough to pay off debts, home loans and other everyday living costs.

• Do TPD payouts affect Centrelink?

  Generally TPD payouts won't impact your Centrelink payments, particularly if that insurance is held within super. However, a TPD payout is a form of income and you should always report any changes in circumstances to Centrelink and seek advice from it directly.

• If I suffer a partial disability, can I make a claim for TPD?

  You may be able to, depending on the specifics of your policy. Some insurers will pay out for income that's lost if you can only work at a reduced capacity because of sickness or injury.

  Also, some policies provide partial payment if you suffer certain disabilities. For example, after the loss of limbs or loss of sight.

  Read more about TPD insurance claims in our comprehensive guide.

• Can a self managed super fund (SMSF) own a TPD insurance policy?

  Taking out insurance through a superannuation fund is a common option and if you have set up your own SMSF then your fund can own your TPD policy.

  In the event of a claim, the benefit is paid to your SMSF and you must meet the guidelines for a superannuation TPD policy to allow you to withdraw the benefit payment before your retirement.

• Do TPD policies have a waiting period?

  Depending on the policy you choose, you may be required to be unable to work because of an illness or injury for at least 3 to 6 months, before you start receiving any benefit payouts.

• Can you claim TPD if you are not working?

  If you're no longer actively employed or are doing work that's unpaid but still your full-time activity, you may be eligible for 1 of the following types of TPD insurance:

  • Home Duties. This policy type is designed specifically for homemakers and offers cover for people for whom domestic duties are generally their full-time activity. Even if homemakers do not earn a salary, they still perform a host of vital duties in and around the home and to assist the rest of the family. Under a Home Duties definition, if you're no longer able to perform your regular domestic work you may receive a benefit. This type of cover can help with things such as home maintenance, childcare and the cleaning and cooking.
  • Non-working TPD. This option is generally not available when you first take out TPD cover but then becomes available when you reach a certain age. However, most working TPD policies will convert to this definition on your 65th or 70th birthday. Under this definition, you will be eligible to receive a partial benefit if you lose your ability to perform a specified number of daily living tasks or suffer other specific injuries, covered below.
  • Modified TPD. This is a "working" TPD policy where you add on features of a "non-working" policy. These may let you claim on disabilities outside the normal scope of TPD policies when you are still working age.

• Does TPD insurance cover loss of hearing?

  This is a little more tricky. In order to trigger a payout, TPD policies require the policy owner meets the criteria of total and permanent disablement as a result of their illness or injury.

  Meeting the criteria

  Depending on what's decided on when you apply:

  • You will need to be unable to work for a consecutive number of months in your own occupation (easier to prove).
  • Or unable to work for a consecutive number of months in any occupation (harder to prove).
  • Ongoing care is also required.

  The person claiming will need to seek the ongoing care of a medical professional. The insurer must also deem that the severity of the sickness or illness means that the insured is unable to ever work in regular remunerative work for which they are fitted either by education, training or experience. For an increased premium, applicants can elect to take out cover that will provide a benefit if they are unable to return to their own occupation.

• What is a duty of disclosure? Do I have to do this?

  When looking for TPD cover, you have to disclose any relevant information requested by the insurance provider to allow them to assess your situation. This is legally binding and you must disclose any relevant, known information to avoid the legal consequences of not informing the underwriter about information that may affect the policy.

• What illnesses or injuries are excluded from a TPD policy?

  In most cases only intentional, self-inflicted injuries will be excluded from receiving a successful claim payment.

• Is a TPD benefit paid from the benefit of a linked life insurance policy?

  When your policies are linked and you make a successful claim on your TPD policy, the benefit you receive will be deducted from your life insurance amount. If you don't want your life insurance to be affected by a TPD claim, you can choose a double TPD policy, a TPD buyback benefit or a standalone TPD policy.

• Does TPD insurance cover you when you're overseas?

  You can find TPD policies which will cover you for illnesses or injury you incur while you're travelling overseas or living overseas for an extended period of time. Just make sure you check the conditions of your particular policy with your insurer.

• Who is eligible for the National Disability Insurance Scheme (NDIS)?

  In order to qualify for the NDIS, you need to be a resident, permanently disabled and under 65. While the scheme is a great option if something bad happens, it often doesn't cover all your needs and expenses, which is where TPD insurance comes in.

• What's the difference between TPD insurance and income protection?

  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 debts and living expenses, as well as any immediate medical bills.

  Trauma insurance, on the other hand, pays for critical illnesses and incidents in a lump sum but not permanent disablement.