Total and Permanent Disablement

What is TPD Cover ?

TPD stands for “Total and Permanent Disablement”. TPD cover pays a lump sum payment should you completely lose your ability to ever work again as a result of illness or injury. TPD Coveris designed to help alleviate the significant financial impact that losing an income forever would likely cause.

 FOOD FOR THOUGHT…

• At the time of the 2006 census twenty percent of New Zealanders lived with a disability, with accidents or injuries the most common cause of disability for adults aged 15 to 44 years.
• There are an estimated 60,000 stroke survivors in New Zealand. Many are disabled and need significant daily support.
• In New Zealand, there are approximately 300 people suffering from Motor Neurone Disease at any one time.
• Around 100 people are diagnosed with the disease and 100 people die every year.

What do most people use TPD Cover for ?

• Reducing Debt such as paying off the mortgage people who are permanently unable to work may find their income decreases even when they are receiving a disability benefit such as income protection. Reducing credit card and mortgage debt frees up their finances.
•  Supplementing their income and future income : Most people need more income than a disability benefit if they are going to be on that benefit permanently.
•  Making Lifestyle changes because of the serious injury or illness.
•  Paying for their spouse or another family member to take time off work. Many people need extra help and support when they are dealing with a serious illness or injury.
•  Paying for additional costs such as childcare, wheelchair ramps and travelling to medical appointments. These are common costs associated with serious illness and injury.

How does TPD Cover work ?

 There are three types of TPD Insurances….

• Own Occupation TPD : You can claim your TPD Cover if you are unable to return to your specific occupation. For example, if you were injured and could no longer work as a plumber, you could claim your TPD Cover even if you were able to do another job, such as working ina plumbing company office.
• Any Occupation TPD : you can claim your TPD cover if you are unable to work in any job that you are reasonably suited to by training, education or experience. For example, if you are injured and could no longer workas a plumber, you could claim your TPD Cover if you were also unable to do another job, such as working in a plumbing company office.
• Modified TPD : A good, low cost option if you are not in paid employment, you are in a very high risk occupation or are not eligible for Own or Any Occupation TPD. Instead of using an occupation definition, modified TPD applies if your permanently:
  • # lose the use of your limbs or sight
  • # are unable to perform daily living activities
  • #Lose your ability to think or concentrate

Types Of TPD :

• Stand Alone : Your TPD cover is separate to your term life Insurance cover. A TPD claim won’t reduce the amount of life cove you have.
• Accelerated : Your TPD insurance is linked to your life cover. So if TPD claim is paid your life cover is reduced by that amount. However you can choose to reinstate your life cover if this happens.

Premium Types

• Level Premium payments : You can choose a level premium payment option and lock your premium payments in so they don’t increase with age – like a fixed rate mortgage
• Stepped premium payments : Stepped premiums start lower than level premiums but increase each year based on your age at that time. If you have an accident you should be covered by ACC, but knowing that you have other sources to help you in your disability may be beneficial.

For more information or a free no obligation review of your insurance needs then please contact us on 0800 50 7770 or email us on harpreet@lifecyclefinancial.co.nz