Life Insurance and TPD insurance misconceptions

When looking into life insurance and TPD, there are two huge misconceptions that exist in regards to TPD insurance that many Australians still believe. It is important to clarify these misconceptions so that you can make an informed decision when buying personal insurance.

One of these misconceptions is that TPD insurance is automatically built into a life insurance policy! The truth is that TPD insurance is a policy that you are required to add onto your life insurance either by including it within the policy or by taking out a separate policy.

Another major misconception is that all Total permanent disablement (TPD) insurance policies have the same level of cover, but nothing could be further from the truth!

There are four main types of Total permanent disablement (TPD) insurance definitions available in the market however there are huge differences in coverage. These definitions are:

• Modified;
• Home duties;
• ‘Any’ occupation; and
• ‘Own’ occupation.

The worst of these definitions is the ‘Modified’ definition, while the ‘Own Occupation’ definition is most ideal.

So when you are comparing Total permanent disablement insurance coverage please make sure you are aware of the definition you are covered for, and the definition of coverage you require. You can check these by reading the PDS of the policy, or your life insurance quotes (which may list the definition you are applying for).

Related Links: Life Insurance, TPD Insurance