In some cases following an illness or accident, a person can become totally and permanently disabled and, as a result, can never work again. A life insurance policy on its own would not cater for this situation.

It is a good idea to add TPD insurance to your life cover specifically to cater for this situation. Once again, TPD insurance is relatively affordable depending on a person's age, health and occupation. In general terms, the greater the level of physical activity in an occupation, the greater the premium. In extreme cases, for example those working at great heights or with explosives, it can be extremely difficult to obtain any TPD cover at all due to the high level of occupational risk.

There are usually two TPD definitions available with an insurance policy ('own occupation' and 'any occupation'). There are slight variations in policy wordings across the many policies available, but in general terms the wording for the two definitions is as follows:

'Own occupation'

A person must be rendered permanently unable to ever engage in his/her own occupation or profession. This is the preferred definition and will add a few extra dollars to the monthly premium.

'Any occupation'

A person must be rendered permanently unable to ever engage in any business, profession or occupation for which he/she is reasonably suited by education, training or experience. This is a broader definition and the one most commonly found in existing "in force" policies. The main reason for this is people simply don't understand there are two definitions available. In addition, the 'any occupation' definition attracts a cheaper premium.

However it is important to emphasise that the 'any occupation' definition will normally apply to any TPD insurance cover held within a superannuation fund.

To find out how DBT can help protect you, contact us today.