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Total & Permanent Disability Insurance Explained

This is a product that is an optional "add-on" to a basic life insurance policy that is paid out in a lump sum. There are 2 scenarios that are considered being any occupation total permanent disability and own occupation total permanent disability.

  • With both ANY and OWN occupation total permanent disability the person needs to become completely incapacitated as a result of illness, accident or both for the policy to be claimed against. AND where they are not able to work in any occupation or business that they have been involved in for 3 months or longer and after medical consideration or evidence satisfactory to the insurer that they are considered that the incapacity is likely for them to never be able, in their occupation, or any other gainful employment based on the individuals experience, education and training ever again.

  • However with OWN occupation total permanent disability the following definitions maybe included:
    A person may be deemed to be totally disabled, depending on what the policy stipulates, if they have irrecoverable loss of either both hand or both feet, the sight in both eyes, the loss of one hand, the loss of one foot, the sight in one eye, that their mental capacity is reduced or deteriorated to the extent they require continuous supervision for at least 3 months and are likely to require this continuous care or is they are unable to perform, without assistance, at least least 2 of the following "Activities of Daily Living":
    Using the toilet
    Dressing & undressing
    Bathing or showering
    Eating and drinking
    Have no means to be mobile by either walking, using a wheelchair or walking aid.

As with life insurance, the premiums charged by the insurer will be related to age.
There will be "terms and conditions" to this type of cover which usually would include:

  • Maximum monetary limits

  • Limitations based on the person's past, present and family members health histories.

  • Limitations on certain mental health disorders.

  • Exclusions if the condition is a result of self infliction, criminal activities and deliberate misuse of drugs.

  • Exclusions on conditions that may be treated or improved by other treatments such as surgery.

  • There is often a "stand down" period.

  • Certain specified "high risk occupations may be excluded or maybe subject to "loading" with higher premiums.

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