What is TPD Insurance?
Total and Permanent Disability insurance pays out a lump sum in the event that you suffer a serious and significant disability that prevents you from ever working again. The leading causes of claims for TPD insurance are cancer and musculoskeletal conditions.
There are two options for TPD cover; own occupation or any occupation. Own occupation cover means that you will receive the insurance benefit if you are unable to work in your current job. This option can now only be held outside superannuation. In contrast, any occupation is a stricter definition of disability, where you will only receive the payout if you are unable to work in a job that is reasonably suitable for you based on education, experience and training. This option can be held inside superannuation and the premiums can be tax deductible.
Professionals Should Be Aware
For highly trained professionals such as dentists, surgeons, barristers or engineers, it is worth considering own occupation cover. Though this policy can no longer be held entirely inside superannuation, it has recently become possible to hold a TPD policy that is linked with any occupation – inside, and own occupation – outside the superannuation environment; enabling clients to have own occupation cover with some tax deductibility.
Who Should Have TPD Insurance?
We would encourage all clients to regularly review their personal insurances including TPD, life, trauma and income protection insurance. Personal insurance can be complex and your financial adviser will be best placed to make a recommendation for you considering your personal circumstances.
Contact Brendon, Raghu or David on 9908 9888 or wealth@edneyryan.com.au to discuss appropriate personal insurance cover.