Total and Permanent Disability

Total and Permanent Disability Insurance is a type of insurance coverage that pays you a lump-sum of money when permanently disabled. Ideally, you will receive a payout if you are unable to go back to your daily activities. You can spend the money to put your kids through school, pay for your medical therapies, and any other suitable way. If you are injured, but your doctors expect you to have a full recovery after a few months, you will not qualify to get compensation. Your injuries must be severe enough to prevent you from going to work.

However, there are mild injuries that may not stop you from going to work, but they may change how you do things. Such injuries may qualify you for a certain percentage of the full payout. For instance, if your finger gets accidentally cut, it will reduce your capacity to perform specific tasks. You may be given maybe 25% of the full payout as compensation by your insurance provider.

Four essential things about Total and Permanent Disability Insurance

• It is a No-Fault Insurance: To claim compensation in this type of insurance, you don’t have to prove that the injury was not out of your negligence. You also don’t have to prove that someone else was at fault or the result occurred due to someone else’s negligence. Primarily, provided you are permanently disabled, you are qualified to claim compensation from your cover.
• It Covers both Physical and Mental Permanent Disabilities: Generally, suffering a significant physical injury due to an accident will render you disabled because you will no longer engage in your daily activities. It is the same as when you suffer a mental illness that permanently damages your brain. Ideally, you will also not be able to work to provide for your family. It is where the TPD cover comes in. In a nutshell, its primary purpose is to cover you when either of these events happens.
• The Cover Options are Flexible: The cover options for TPD are diverse, and you can choose any cover depending on your occupation or lifestyle. For instance, if your working environment contains heavy machinery, the chances of getting a fatal injury are significantly high. Thus, you can take an accident cover. If you are generally an adventurous person, and part of your lifestyle activities involve sky diving, your chances of getting a fatal accident are high. Furthermore, you can also take an illness cover. It will cover you if you develop an illness that may render you disabled, like a neurological disease, for instance. Additionally, you can get stepped premiums, which increase with your age and the level of cover you have taken. But with level premiums, the premiums remain constant, and they are also cost-effective. Additionally, it is also possible to increase the level of premiums. It would primarily help if you increased your premiums when significant changes happen in your life, and your responsibilities increase. For starters, when you become a parent, your responsibilities increase, and you should increase your premiums so that your lump-sum payout increases.
• The Premiums Vary: The cost of premiums for this type of insurance cover is not the same. As such, how much premiums you will pay per month depends on several factors.
  • Age. The older you are, the more premiums you will pay. It is because the risk of contracting severe diseases that can make you disabled increases with age.
  • Occupation. If your work environment poses many risks of fatal accidents, then you will pay higher premiums. For instance, if you work in an environment surrounded by machinery, your chances of getting involved in a fatal accident are higher. Moreover, if you play sports that involve high contact, like American Football, your chances of also getting a fatal injury are high. Thus, you will pay higher premiums too.
  • Your lifestyle. Your lifestyle also plays a significant role in the number of premiums you will pay. Ideally, if you are a smoker, you are likely to pay higher premiums. It is because your chances of contracting cancer are high. The cancer treatments may be aggressive, and you may be unable to work. Thus, you become disabled.

How is TPD Different from Income Protection?

TPD is not the same as Income protection because it pays you a lump sum, but income protection may pay you monthly for up to 75% of what you earn. However, there are also income protection policies that payout a lump sum.

How Can I Ensure a Successful TPD Claim?

While you may not have to prove that the injury you suffered was not because of your negligence, there are certain things you must do right to ensure that you successfully get your compensation when you are permanently injured.

• You must disclose all the relevant information at the time you are purchasing a TPD cover. Later on, if it is discovered that you did not disclose essential information, you may end up not getting your claim. For starters, if you have an underlying condition that you did not disclose, and it, later on, becomes the cause of your disability, you may not receive your claim. Some people deliberately do this to avoid paying high premiums. Thus, to ensure that you successfully get your compensation, you must disclose all the relevant information when applying for the insurance cover.
• If you don’t satisfy all the terms of your policy, you may miss out on when it comes to collecting your claim. The insurance company may use this against you, and it will be a vital tool for denying your compensation. Hence, you should ensure that you follow all their terms and conditions if you want to successfully claim your compensation.
• Finally, if you also fail to provide sufficient evidence that your disability is permanent and absolute, the insurance company may also deny you compensation. As such, you should ensure that you provide your insurer with all the medical reports that show that you are permanently disabled.

Indeed, not having TPD insurance is tragic. While it is not a guarantee that you will get permanently disabled at some point in your life, it is always safer to have a way out. It will save your family a lot of stress if you get permanently disabled because of the lump sum amount it gives you. Ideally, while you will not be able to go to work, you will still provide for your family.