What is TPD insurance, and should anyone eligible consider it?

When we’re young and healthy, it might seem unnecessary and overly cautious to think about subjects like TPD insurance, but is that a mistake?

This article will examine TPD insurance’s role in any adult’s life in Australia and how it can be a complete game-changer if the unthinkable comes to pass.

What is TPD insurance?

TPD insurance is generally defined as:

“A specific form of health insurance that only becomes valid when the policyholder is rendered ‘totally and permanently’ disabled.”

The reasons behind this unfortunate disability vary enormously but often include accidents in the workplace, illness and disease, or other debilitating injuries.

Situations like these often incur elevated costs that can spiral into the extreme, depending on the circumstances. TPD insurance provides financial assistance in these cases and can be the difference between families comfortably adjusting to their new reality or struggling terribly.

Note: Caveats and exclusions are common with TPD insurance, so a heightened awareness and complete understanding of the terms and conditions are essential before purchasing a policy. 

Is TPD insurance right for me?

Nobody can know what the future holds in store, and that’s the essence of why insurance exists at all. Some prefer to gamble and hope that they never need to fall back on an insurance policy. And in the long run, they save the money they would have spent on their policy. But the consequences of losing that gamble with something so life-changing as a total permanent disability are dire indeed. 

None of us ever wants to make a claim, just as we hope never to test our motorcycle helmet’s strength in the suburbs of Sydney or discover whether our car’s airbags are working on the Great Ocean Road.

These things protect us if the worst should happen, allowing us to spend the rest of our time hoping for the best. If you feel you might like to take out some TPD insurance but are not convinced, ask yourself the following questions: 

  • Is my occupation dangerous?
  • Do I lead a well-balanced lifestyle that would be considered relatively healthy?
  • In the event of being totally and permanently disabled, could I afford to absorb the extra costs and loss of income without financial assistance?
  • Do I engage in risky activities and dangerous pastimes?

These questions are not the only ones you should ponder before investigating TPD insurance policies further, but they represent a good starting point and convey the general idea. A TPD insurance policy protects you in all of those situations and more for what is often a surprisingly low premium. 

Do you need to take out a TPD policy?

As far as we’re concerned, the bottom line is this: Any Australian fortunate enough to afford TPD insurance premiums should take out a policy.

The situation is vastly different than when dealing with life insurance because you are the one who stands to benefit from the protection a policy provides if the worst should happen. It’s not a kind thought to provide for your loved ones after you’re gone; it is an actual, tangible form of income you will desperately need if you find yourself incapacitated.