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Total and permanent disability (TPD) insurance

Insurance cover for a permanent illness or injury

Page reading time: 3 minutes

A permanent injury or illness can make it difficult or impossible to return work. TPD  insurance can provide a financial safety net to help support you and your family, and pay for medical and rehabilitation costs.

What TPD insurance covers

TPD insurance pays a lump sum if you become totally and permanently disabled because of illness or injury. 

Each insurer has a different definition of what it means to be totally and permanently disabled. It can cover you for either:

Read the product disclosure statement (PDS) so you know how your insurer defines a total and permanent disability. Call the insurer or your super fund if you have questions about the policy.

Decide if you need TPD insurance

When deciding if you need TPD insurance, and how much, think about the expenses you'll need to cover if you were permanently disabled and unable to work. These could include:

Also think about what you have that could help pay for these costs. This could include:

The gap between the amount you have and the amount you'll need can be a guide as to how much TPD cover you may need.

If you need help deciding if you need TPD insurance, and how much, speak to a financial adviser.

How to buy TPD insurance

Check if you already hold TPD insurance through your super. Most super funds offer default TPD cover that's cheaper than buying it directly. You can increase your level of cover through your super fund if you need to.

You can also buy TPD insurance from:

TPD insurance can be bought on its own or packaged with life cover. If it's packaged, your life cover may be reduced by any amount paid out on a TPD claim. Check the PDS or ask your insurer.

TPD insurance premiums

You can generally choose to pay for TPD insurance with either:

Your choice of stepped or level premiums has a large impact on how much your premiums will cost now and in the future.

Compare TPD insurance policies

Before you buy TPD insurance, compare policies to make sure you get the right one for you. Check:

A cheaper policy may have more exclusions, or it may become more expensive in the future.

What you need to tell your insurer

You need to tell your insurer anything that could affect their decision to provide you with TPD insurance. You need to give them this information when you apply, renew or change your level of cover. 

Insurers usually ask for information about your:

If an insurer doesn't ask for your medical history, it may mean their policy has more exclusions or narrower policy definitions.

The information you provide will help the insurer to decide:

It is important that you answer the questions honestly. Providing misleading answers could lead an insurer to decline a claim you make.

Making a TPD insurance claim

If you want to make a TPD claim, see making a life insurance claim for information on what to do.