What Is TPD Insurance And Why You Should Have It?


Total and Permanent Disablement (TPD) insurance is a type of life insurance that is designed to protect workers from financial consequences if they lose the ability to ever work again, through illness or injury.

TPD insurance pays you a lump sum amount if you suffer a severe injury or illness (including mental illness) that means you are totally and permanently disabled, and you are deemed unable to ever return to work again. It is designed to replace your income and help pay your medical expenses, bills and debts that you might struggle to pay if you become unable to earn a living.

Some people often get confused with TPD insurance and income protection insurance so, here is a short and clear description of the differences between these two insurance products:

  • Income Protection provides a benefit if you get ill or injured and can’t go to work temporarily. Income protection insurance will provide a certain percentage of your regular income (usually paid fortnightly or monthly) until you can get back to work.
  • TPD insurance offers a benefit for permanent disablement by providing a lump sum benefit when you can’t get back to work permanently due to illness or injury.


Many people don’t put enough effort into choosing their TPD insurance, although they certainly should. If you think in terms of your TPD cover needing to be sufficient to cover you never being able to earn an income again, you’d want to make sure you had the sum insured right (within personal budget constraints).

Also, there can be significant differences in policy terms & conditions. Did you know each insurer has a different definition of Total and Permanently Disablement? And there are two different types of TPD insurance “Any Occupation” and “Own Occupation”.

Any occupation: If you take “Any Occupation TPD cover”, you can claim the cover if you can no longer work in any jobs that suit your education, or experience.

Own occupation: Like the name says “Own Occupation” you are eligible to claim this cover if you can no longer work in your current job.

Let’s take an example to make it clearer:

If you lost your finger due to some injury and become unable to perform your current job, if you have own occupation you will receive the full TPD benefit. However, if you had any occupation cover, you might not be able to receive your benefit because you may be able to be trained to do a different type of job that losing your finger wouldn’t impact.

So, it would be best to be careful while selecting TPD insurance products. Although the own occupation policy has a higher premium compared to any occupation, the benefits of that option are clear.


‘Any Occupation’ TPD Insurance is the best way to guarantee that you will be protected if an incident leads to your total or permanent disability. Credit: iStock


Why Should I Have TPD Insurance?


When deciding if you should have TPD insurance or not, you need to assess your individual situation and your needs. Think about the expenses you would have to take care of if you were suddenly unable to work ever again.

Here are some of the expense that you may have to cover:

  • Living expenses for you and your family
  • Medical costs
  • Repaying debts and mortgages
  • Providing an education for your children
  • Rehabilitation and home modification expenses

Will you be able to manage all these expenses if you become unable to work? Do you have enough savings to take care of all of your expenses?

The right TPD insurance can ensure that you won’t have to rely on other ways to manage your expenses, if you become totally and permanently disabled. Many people would not be able to cover their expenses if they became unable to work, so the best option is to get TPD Insurance. Be smart and act today to secure you and your family from an unpredictable future

Mike Wallis

Mike has over 25 years experience, having spent his first seven years working as a Broker at Jardine Lloyd Thomson in Melbourne and in 2002 was transferred to JLT’s Accident and Health Department in London. For four years (2002 – 2005) Mike was a specialist A&H Lloyd’s Broker and during this time developed excellent relationships with the Lloyd’s A&H underwriting fraternity. In 2006 he returned to Australia in a senior broking position with overall responsibility for Placement Strategy, including the implementation of underwriting facilities and the various authorities granted by Lloyd’s. Mike was the underwriter at two specialist Underwriting Agencies prior to founding Aspect Underwriting in 2016.