Good Advice, Good Value, Good People

Archive for total and permanent disability insurance

Are Your Wealth and Family Protected?

Total and permanent disablement insurance, or TPD, is a form of disability insurance that pays you a lump sum payment in the case that you are never able to work again due to disability. TPD can help ensure that your needs and your family’s are covered if you become permanently unable to work. (1)

Total And Permanent Disability Insurance

Sadly, a disability can happen to anyone, young or old. A person can suffer a debilitating injury by playing sports, driving or even walking down the street. A head trauma or severe illness can have life-changing consequences. These are all risks that we face every day of our lives, even if they aren’t in our consciousness.

How TPD can Help You

If you sustain an injury or illness that makes you unable to work, TPD can help you provide for your family. It is usually purchased in tandem with life insurance to provide a “financial safety net” for you and your family in the event that you are no longer able to work. (2)

TPD is usually purchased in one of two formats. It either protects you if you can no longer work in your own occupation or if you can no longer work in any occupation. It can help you cover the costs of debt repayments, rehabilitation and your costs of living in the future. (2)

Each insurer has a different set of definitions that determine whether you are deemed “totally and permanently disabled.” For example, an injury that requires you to take a year away from work does not qualify as being “permanently disabled.” It is important to know exactly what is on your coverage. (2)

Call Approved Financial Planners Today

To learn more or to enquire about total and permanent disability insurance, call us today: 08 6462 0888.

AMP, “Total and Permanent Disablement: Protect your future and the future of your loved ones.” https://www.amp.com.au/personal/insurance/products/insurance/total-permanent-disablement#our-tpd-products
Australian Securities and Investments Commission, MoneySmart, “Total & Permanent Disability Cover.” https://www.moneysmart.gov.au/insurance/life-insurance/total-and-permanent-disability-cover

Is the National Disability Insurance Scheme Enough to Protect You and Your Family?

Currently, the National Disability Insurance Scheme (NDIS) has two trial sites in the Perth area. The NDIS is under the umbrella of the National Disability Insurance Agency (NDIA). It is currently available for residents of two Perth suburban areas: the Lower South West and Cockburn/Kwinana.

Financial Planner Discuss NDIS

What is the NDIS?

According to their Government website, the NDIS is a scheme in which the disabled are offered community assistance to help them live better lives. It is designed to assist not only people with disabilities, but their carers and their families. It is intended to provide those who suffer a significant and permanent disability. Assistance includes information, referrals, individualised supports and plans, early intervention and support to help access activities and community services.*

However, there is one thing that the NDIS isn’t: it is not Total and Permanent Disability Cover.

What is Total and Permanent Disablement Cover (TPD)?

TPD or Permanent Incapacity (PI) cover is a wealth protection vehicle that pays you a pre-determined lump sum if you are disabled while the policy is in effect. You receive the lump sum if you are never able to work in your own or another occupation you are suited to through your education, training or experience.

Our parent company, AMP, provides TPD or PI cover. It is designed to provide support for you and your family if you are unable to work again. It is usually used to cover debts and to compensate for the loss of income.

There are three basic types of TPD cover: Own Occupation, Any Occupation and Activities of Daily Living (ADL). PI cover definition allows for Any Occupation and ADL only.

Own Occupation TPD covers you if you are unable to work in your own occupation again. Any Occupation TPD/PI covers you if you are unable to work in any occupation. ADL TPD/PI covers you if you are unable to conduct two out of the five activities of daily living.

Call Approved Financial Planners Today

Each individual situation is different. The best way to know whether or not you would benefit from TPD cover is to talk to one of our financial planners. Call 08 6462 0888 today.

*NDIS: “What Help Can I Get.: https://www.ndis.gov.au/people-disability/what-help-can-i-get

How Much Permanent Disability Insurance Do You Need?

Why it is still important to have permanent disability insurance in Australia.

With the rollout of DisabilityCare Australia, many Australians are of the mistaken impression that it will no longer be necessary to purchase permanent disability insurance. This is not true, as the current setup will not affect Australians who suddenly find themselves with a total and permanent disability due to accident or illness.

So, how do you decide exactly how much total and permanent disability insurance (TPD) you need?

How Much Permanent Disability Insurance Do You Need

The first thing to do is to get a firm grasp on your personal financial situation. For example, how much money do you owe on credit cards. You probably also have an automobile loan and a home loan: how much would it cost to pay them off? How much would it cost for utility bills? How much would it cost you to eat?

If you suffer a permanent disability, you may also have to retool your home and automobile to help compensate for your disability. You may also need carers to help you in your diminished physical capacity. How about your general living expenses? You may also want to make investments in the future. How much money will you need on a monthly basis to cover all of this?

You will probably want to also take inflation into account and the possibility of interest rates rising, because these factors may increase your mortgage repayments.

If you already have income protection cover, you can subtract those payments from the amount of money you would project needing in the case of permanent disability.

Talk to Us in Person

The above recommendations are general in nature, but there really isn’t a “one size fits all” solution here. Everyone’s financial situation is different. Our Perth financial planners and insurance specialists are experts at helping people determine their true financial needs. Often, people have hidden debts or hidden assets, about which they have forgotten.

We help you produce an accurate assessment of your financial needs and then help you find a way to get to where you want to go. We offer many more services than insurance; we are a virtual “one stop shopping” solution for all of your financial service and insurance needs. Integrating them all into one package can be very beneficial.

Call 08 6462 0888 today.

The Difference Between Trauma Cover and Total Disability Insurance (TPD)

Many Australians carry both trauma cover and total disability insurance (TPD). Here’s why.

Although trauma cover and total disability insurance (TPD) are similar, they are designed to produce two different outcomes. That makes it important to understand what both coverages do and what they don’t do.

Difference Betweek Trauma and TPD Insurance

Trauma Insurance: the Basics

Trauma insurance is taken out for specific illnesses. It pays out a lump sum if you are diagnosed with that illness. The lump sum is designed to help you take care of your financial responsibilities while you recover: both your standing expenses and new expenses such as rehabilitation or carers. Ideally, you are able to fully recover and get back to living your life with no severe financial consequences.

Trauma insurance covers such illnesses as cancer, heart attack and coronary bypass surgery. The illnesses are very specific and are defined within your insurance policy so that you know exactly what occurrences will result in benefits and what ones won’t.

Total and Permanent Disability Insurance: the Basics

Total and permanent disability insurance is taken out for if you become permanently disabled. The payment can be on a monthly basis or in a lump sum. It is designed to help you maintain an income similar to your current one to support yourself and your family. It can also be used to help pay off some of the medical bills you may incur as a result of your disability.

Basically, TPD insurance replaces your income if you are no longer able to work. Policies can be written to cover you if you can no longer work in your field or can require that you are unable to work any job. Obviously, the job-specific coverage will cost more.

The Main Difference Between Trauma Insurance and Total and Permanent Disability Insurance

The main difference between trauma insurance and total and permanent disability insurance is that trauma insurance will pay you for the specified illnesses while you are trying to get back to work, while TPD insurance doesn’t pay you unless you can never go back to work.

Consequently, trauma insurance costs more and is more likely to result in a claim.

Call the Professionals

Call the Perth professionals at Approved Financial Planners for a free consult: 08 6462 0888.

The Benefit of Having Both Total Permanent Disability (TPD) and Life Insurance

Insurance provider in Perth explains how a disability insurance scheme is benefitting many Australians who suffer from total permanent disabilities.

One of the main advantages to bundling is that you can work with one insurance agent and develop a plan that is both customised and comprehensive, without the inconvenience of managing multiple policies.

Benefit of Having Both Total Permanent Disability (TPD) and Life Insurance

Bundling TPD and life insurance can be particularly beneficial if someone becomes totally and permanently disabled and then dies shortly thereafter. However, collecting TPD payments can often reduce the life insurance benefit. For example, if you have $500,000 worth of TPD cover and $1 million in life insurance, collecting the $500,000 for TPD will change your payout for life insurance to $500,000 with a standard policy.

TPD Buyback and Double TPD

Some policies allow the user to “buy back” whatever life cover was affected by collecting TPD money. Restrictions vary from policy to policy.

Other policies have a “double TPD” feature in which there is no life cover reduction when collecting TPD. In addition, some policies state that a buyer who collects TPD is no longer responsible for paying the premiums on their life insurance.

Eligibility for double TPD varies from policy to policy, but usually one must be performing domestic duties for at least 20 hours per week or employed for at least 20 hours per week, with a minimum of 12 months at the current position.

Double Life Cover

Another strategy is to purchase more life cover than you need in the amount of the TPD benefit. For example, if you want $1 million in life cover and $500,000 in TPD cover, you could purchase $1.5 million in life insurance. When the payout is reduced by $500,000, it becomes the $1 million you wanted in the first place.

How to Shop for a TPD/Life Insurance Bundle

Make sure you know the definition of disability for your policy. An Own Occupation policy means that you are paid if you can’t return to your original occupation. An Any Occupation means that you have to be disabled that you can’t work in any occupation if you want to be paid your cover amount.

For more information, call (08) 6462 0888.

Total and Permanent Disability Insurance: What It is and Why You May Need It

Total and Permanent Disability Insurance can keep you from depending on others if you are permanently disabled.

Nobody wants to think about what would happen if they were permanently disabled. A lot of people say, “it will never happen to me” and don’t think twice about it until they suffer a serious injury. Sadly, it could happen to you.

Total and Permanent Disability Insurance: What It is and Why You May Need It

Ask yourself what would happen if you were suddenly unable to work. How would you live? Who would pay your bills? Do you have enough of a “nest egg” to take care of you if the unthinkable were to happen to you tomorrow?

With total and permanent disability insurance or TPD, you don’t have to worry about being broke and unable to work. So, what is TPD insurance?

What is Total and Permanent Disability Insurance?

TPD insurance is a policy that pays you if you suffer a permanent disability and are incapable to work; the disability can be caused by injury or illness. The policy is designed to compensate for lost income and to help you pay for extra medical and rehabilitation expenses that aren’t covered in your health insurance.

TPD insurance is available in two basic types: any occupation and own occupation.

An “any occupation” policy means that your disability must prevent you from working any job, whether it is inside or outside your field of expertise. In other words, the policy only pays you if you become disabled to a point where you are unable to do any job.

An “own occupation” policy means that your disability prevents you from working your current job, in which you have been trained and have experience. If you become disabled and can’t work your current job, it will start paying immediately. However, if you are able to receive training and work another job, benefits will end when the next job starts.

Benefits of TPD Insurance

Peace of Mind

Even if you never have to make a claim on your TPD insurance, you have peace of mind because you know that you are covered in case you are unable to work. This can remove a lot of financial stress for those who haven’t had the time to amass a retirement fund that is sufficient to provide a living.

Financial Protection

TPD insurance protects you from the serious consequences of a permanent disability. If you depend on your work income for living expenses, having that income taken away could have devastating effects on your finances. TPD insurance protects you by providing financial security and stability in case of disability.

Improved Quality of Life

For many who become disabled and unable to work, their quality of life can deteriorate quickly. Not only are they unable to create income, they also can suffer from a lack of self-esteem and difficulty performing even routine daily tasks.

The payout from a TPD policy can help refit your living space to compensate for your disability. It can also help with medical expenses and replace the income you are no longer able to make otherwise. You may even be able to take a trip or vacation and relax once in a while.

No amount of money ever fully compensates one for disability, but a TPD policy can certainly improve the quality of your life.

How Much Cover is Appropriate for You?

Everyone’s financial situation is unique; there is no “one size fits all” answer to this question. However, there are some questions you can ask yourself concerning your financial state to help determine what may be appropriate coverage for you at this time.

What is your income level?

Whatever your income level, you have become used to it. Your lifestyle probably reflects your current income level. You may or may not be providing for your family. Regardless, if you were to lose your present income, you would at least need to replace it to prevent a diminished quality of life.

How many dependents?

If you are taking care of a family, you may have future plans for your children, such as paying for their education. Make sure to take your dependents into consideration when determining appropriate cover.

What is your level of debt?

If you owe money, your creditors won’t care that you have just become disabled and can’t work. They may give you a month or two but they will still want their money. If you fail to consider your debt level, you could end up with less money than you think if you ever become disabled.

Approved Financial Planners

At Approved Financial Planners, we can help you determine how much TPD insurance is right for you. Call (08) 6462 0888.