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Life insurance pays if you die. Income protection pays if you're sick for a while. But what happens if you survive a serious accident or illness but can never work again?
That’s where TPD Insurance comes in.
Total and Permanent Disability (TPD) insurance provides a tax-free lump sum payment if you become permanently disabled due to illness or injury.
It is designed to "replace you" financially. If you can no longer earn an income, this payout clears your mortgage, modifies your home (e.g., ramps, bathrooms), and provides an investment fund to generate future income.
The most common reasons for TPD claims in Australia are:
Not all TPD policies are the same. The definition of "disability" matters hugely.
Most cheap policies and superannuation funds use this definition.
Typically only available outside of superannuation (retail policies).
| Feature | Inside Super | Outside Super (Retail) |
|---|---|---|
| Cost | Premiums paid from Super balance (cash flow friendly) | Paid from bank account (affects monthly budget) |
| Definition | Almost always "Any Occupation" (Harder to claim) | Can be "Own Occupation" (Easier to claim) |
| Tax | Payout may be taxed (complex) | Payout generally tax-free |
| Speed | Slower (Insurer + Trustee approval needed) | Faster (Direct with insurer) |
Consider TPD insurance if:
TPD is the safety net for the "living death"—where you survive, but your financial earning capacity dies. For most professionals and tradespeople, "Own Occupation" cover provides the only real security.
Do you have 'Junk' TPD in your super? Compare high-quality Own Occupation cover today.
Compare TPD Quotes