What is Total & Permanent Disability Insurance?
Total and Permanent Disability Insurance also known as Permanently Unable to Work Insurance are policies that are intended to assist you in case you are permanently unable to work due to injury or illness. It is a lump sum payment intended to cover your debts, lost income or medical and rehabilitation costs. Total and permanent disability insurance can be fairly complicated, which is why it is important to understand what cover it provides you and the types of injuries and conditions it offers protection against.
What is not covered under Total & Permanent Disability Insurance?
Every insurance policy is different, so it is difficult to know what you are and are not covered for without looking at the fine print of the policy. However, there are a few things that most TPD insurance policies do not cover.
- Pre-existing conditions: If you have a pre-existing condition causing your permanent disability that occurred before you took out the policy it will generally not be covered by the insurer. In these cases, it is always important to check with your insurance provider to understand what you may be eligible for.
- Minor injuries and conditions: Total and permanent disability insurance is intended to cover you if you have an injury or condition that you are likely not going to recover from and that will cause you to be unable to return to work in your profession or any other profession that you have the skills and training to perform.
What injuries and conditions are covered under Total & Permanent Disability Insurance?
Every insurer has their own way of defining total and permanent disability, however, a common way of defining it is any injury or condition where you have lost a quarter of your ‘whole person function’, this could be something like losing a limb, part of a limb or loss of sight. This condition also needs to stop you from being able to engage in paid work either in your own occupation or any occupation for which you have the required skill set, training, experience or education. The types of injuries or conditions generally include:
- Long term illnesses
- Loss of a limb or part of a limb
- Loss of sight
- Loss of hearing
- Severe psychiatric illness
- A combination of injuries such as spinal injuries, nerve injuries, and other musculoskeletal injuries
There are different ways that people become totally and permanently disabled, and not every insurance provider covers all of them, so it is important to look at what injuries and conditions particular insurance companies cover, to ensure that you are adequately protected. Broadly however there are three types of injuries and conditions that may be covered by total and permanent disability insurance:
- Injuries and conditions resulting from accidents
- Injuries and conditions resulting from illness
- Injuries and conditions resulting from participating in sport or other recreational activities
It is important to reiterate that not all total and permanent disability insurance policies will cover all these conditions. LawAdvice are experts in obtaining all of the relevant documentation from the insurer, such as the Product Disclosure Statement, in order to review and advise you of your rights and entitlements.