What Is Death & TPD Insurance?

Death insurance is also known as ‘life cover’, and is a type of life insurance. In the event of your death or the diagnosis of a terminal illness, it will usually pay a lump sum of money to the people you nominate as beneficiaries. If you haven’t nominated any beneficiaries, a Trustee or your estate will determine who your money is given to.

Total and Permanent Disablement Insurance (TPD) insurance is usually provided with Death insurance or life cover. TPD is there to provide you and your family with a financial safety net in the event that you become totally or permanently disabled, or you suffer a serious injury or illness that stops you from working in any/or your usual occupation.

TPD insurance is there to help cover expenses that you may have including rehabilitation, payments of debt, and the future costs of living that you will incur. Each insurance company that you may deal with will have their own definition of what qualifies as a total and permanent disablement, so check the fine print in their Product Disclosure Statement. For example, you may not be considered totally or permanently disabled if you are unable to work for only a year, and would likely be able to return to work after that period.

How Do I Know If I Need Death or TPD Insurance?

When considering if you need TPD insurance specifically, consider the following:

• Other types of life insurance you already have, including with your super fund
• The amount of income you and your family will need to get by if you were unable to work
• Any other help or family assistance you might have available to you
• If you would be willing to sell your home and move somewhere more inexpensive to save money and lower your costs of living
• If there would be any government benefits or worker’s compensation that would be available to you if you were to become permanently disabled.

There is no ‘one size fits all’ level of TPD cover, as it depends on your personal situation, age, occupation, lifestyle, and family needs.

Conclusion

Both Death & TPD insurance cover can usually be applied for through your super fund, and can protect you and your family in the event of your death, or if you are unable to work. Check with your fund to see what level of insurance you currently have, and if you are researching your options, make sure you read the Product Disclosure Statements carefully to ensure you select the cover that’s best for you.

For more information on Death & TPD insurance, and selecting the cover that is right for you, contact us.