Total permanent disability insurance

Thank you so much for putting that together.

And for those that don't know, I think the biggest standout statistic for me and the importance of mental health was there was a 730% increase in mental health, sorry, in TPD claims for mental health for blokes 30 to 40 years old i think i've got that right um yeah so that's it's great having our research out there because it can empower the right decisions especially as we go through these reviews so with the position of cali and the recommendation so we have to offer cover i'm speaking the royal way here so we have to offer cover but now there's optionalities with the insurers to offer you know a six month cap or i guess the towel five year delayed payment that sort of thing

yeah

Yeah.

So I can't really sort of talk to what the individual choices of the insurers are, but we're very pleased to see that level of innovation happening in such a short period of time.

Yeah.

With TPD, and that's the sort of the big issue at the moment with the insurers and especially around mental health, APRA stepped in on income protection.

I've heard from all the people that I know that APRA is not looking to intervene at all with the TPD component.

You talk about things like income protection.

You talk about TPD or trauma cover.

Most people don't want to pay for insurance.

But the reality is, is that we know that we have to risk mitigate.

So I saw a financial advisor shortly after uni and They were very much like, you need to have insurances, ideally outside of super, that match, I guess, my earning capacity in my job.

So they got me income protection, trauma insurance, TPD insurance.

that's a little bit split between super and outside of super.

Yeah.

So it gets paid to your nominated beneficiary.

TPD, total permanent disability, you get diagnosed with an illness or you have an accident or an injury that leaves you permanently unable to work, signed off by two doctors, same thing, lump sum cover, paid out to you now and you're still alive.

And that's for you to use at your discretion.

So the good thing to understand is that these covers aren't secured like a mortgage that if you're covering your home loan and you get that money paid out, you don't have to put that onto that mortgage.

It's not secured to that.

You can do as you please with it, but that's the end goal.

So life and TPD, they're essentially that you pass away paid out, permanently unable to work, you're paid out.

Your ability to earn income, provide for the family is gone.

If you pass away, you get a lump sum payment, and it's probably the simplest product to really understand.

Then you've got total and permanent disability insurance or TPD insurance.

It pays a lump sum if you are permanently disabled and you can never return to work in any capacity.

So unlike life insurance, you're obviously still around.

But if you're in business, there could be things like key person, buy-sell agreement, insurance, these sorts of things.

But it's beyond the scope of this blog.

Okay, so the first thing I want to talk about is TPD insurance, total impairment disability insurance.

It does cover a really narrow risk.

relatively low, your investment asset base is relatively low, and you've got a lot of commitments such as mortgages and children and these sorts of things.

So what we've done is put together a calculator that you can use, an Excel calculator that you can download and use to calculate how much cover do you really need, life, TPD, income protection, and talk through some of the considerations thereof.

It's a maybe arguably boring topic, but it's a necessary evil insurance.

So let's just make sure that you're well covered, but you're not spending too much money on it.

So I saw a financial advisor shortly after uni and They were very much like, you need to have insurances, ideally outside of super, that match, I guess, my earning capacity in my job.

So they got me income protection, trauma insurance, TPD insurance.

that's a little bit split between super and outside of super.

Yeah, smart, smart.

But then I have to then probe and go, how much insurance? Is that enough for you? Is that too much for you? So you need to be aware of what insurance cover is in there.

They tend to have life, TPD and income protection in the super.

It can be very minimal levels of cover that maybe your employer set up like a group cover or something like that at some point and it's just continued or something like that.

So

So you need to think about insurance in a broader term.

And a lot of my clients, I've had clients and friends that have had to make claims under their insurance policies, whether it's, um, critical illness, like if they've had a stroke or a heart attack, um, TPD, which is total permanent disability, if you had an accident that meant you could never work again, and obviously life insurance, which is, you know, pretty much that's in the name.

You lost-

A lot of those overlap, don't they? I'm, I've got some of those, including-

... income protection.

Yep.

And I think I have TPD.

I'm just trying to remember now.