Total Permanent Disablement

Provides a lump sum due to being permanently unable to ever work again because of an accident or illness…

You may find this benefit built into the trauma product as a condition with some insurance companies, for more information please ask.

What is TPD Insurance?


  • Total and Permanent Disability: TPD insurance is triggered when the insured person becomes totally and permanently disabled due to illness or injury. The definition of “total and permanent disability” may vary between insurance policies, but it generally means that the individual is unable to engage in any type of gainful employment.

Key Features:

  1. Lump Sum Payment: TPD insurance typically provides a one-time lump sum payment upon the confirmation of total and permanent disability.
  2. Use of Funds: The funds can be used for various purposes, including medical expenses, ongoing care, rehabilitation, mortgage payments, debt settlement, and maintaining a suitable standard of living.
  3. Own or Any Occupation Definition: Policies may define total and permanent disability based on “own occupation” (unable to work in your own occupation) or “any occupation” (unable to work in any occupation for which you are reasonably suited by education, training, or experience).
  4. Waiting Period: There may be a waiting period before a TPD claim can be made, ensuring that the disability is long-term and irreversible.

Why Should You Have TPD Insurance?

  1. Financial Protection:
    • TPD insurance provides a financial safety net by offering a lump sum payment in the event of total and permanent disability. This can help cover living expenses, medical bills, and ongoing care costs.
  2. Supplementing Other Insurance:
    • While health insurance may cover medical expenses, TPD insurance goes beyond by addressing the broader financial impact of a permanent disability, such as modifications to living arrangements or ongoing caregiving needs.
  3. Mortgage and Debt Repayment:
    • The lump sum payout can be used to settle outstanding debts, including mortgages, loans, and credit card balances, relieving financial burdens during a challenging time.
  4. Maintaining Lifestyle:
    • TPD insurance can assist in maintaining a certain lifestyle by covering day-to-day expenses, ensuring that you and your family can continue to afford essential needs.
  5. Rehabilitation Costs:
    • The funds can be used for rehabilitation expenses, including physical therapy, occupational therapy, and other treatments aimed at improving the quality of life after a total and permanent disability.
  6. Flexible Use of Funds:
    • The policyholder has flexibility in using the lump sum payment based on their unique circumstances and needs, providing a customizable solution to address specific financial challenges.
  7. Peace of Mind:
    • Knowing that you have TPD insurance in place can offer peace of mind, assuring you that there is financial protection in case of a life-altering disability.
  8. Long-Term Financial Planning:
    • TPD insurance can be an integral part of long-term financial planning, ensuring that you and your loved ones are financially secure even in the face of unexpected and permanent disabilities.

While TPD insurance is a valuable form of coverage, it’s important to carefully review policy terms, definitions, and exclusions. Consider consulting with a financial advisor or insurance professional to tailor coverage to your specific needs and ensure that it aligns with your overall financial strategy.

 Let’s break down the key components:

Main Events Covered:

  1. Total and Permanent Disability (TPD):
    • Pays a lump sum if the insured becomes totally and permanently disabled and is unable to work again. The definition of disability may vary, including own occupation, any occupation, or inability to perform a certain number of day-to-day duties.
  2. Other Definitions for TPD:
    • Loss of sight, limbs, or significant cognitive impairment, depending on the insurance company. Specific conditions may apply.


  1. Benefit Payment:
    • Paid to the remaining policy owner(s) in the event of a valid TPD claim.
  2. Inflation Adjusted Option:
    • An option to adjust the benefit amount for inflation over time to account for the increasing cost of living.
  3. Renewability:
    • Generally guaranteed renewable until a specified age (e.g., 65-70) once accepted into the policy.

Premium Structures:

  1. Stepped Option:
    • Premiums are rated based on the insured’s age, with increasing prices as the person ages.
  2. Level Option:
    • Premiums can be averaged over a certain number of years. However, level premiums are not always guaranteed and may be subject to annual review.

Additional Benefits:

  1. Life Cover Buy Back Option:
    • Some insurance companies offer a buy-back option where the TPD benefit, which acts as an early payment to the life cover, can be repurchased. After claiming the TPD benefit, the life cover benefit reduction may be offered back at the original terms a year later.


  • Policy Review:
    • It’s important for policyholders to review the terms, conditions, and exclusions of their insurance policy to understand the coverage fully.
  • Premium Structure Selection:
    • The choice between stepped and level premiums should be made considering the individual’s financial situation and preferences.
  • Buy Back Option:
    • The life cover buy-back option can be beneficial for those who want to reinstate their life cover after claiming the TPD benefit.

As with any insurance product, it’s recommended to consult with a qualified insurance adviser or agent to understand the specific details of the policy and ensure it aligns with the individual’s needs and preferences.


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