Are you financially prepared should you become disabled?

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors
, updated on November 25th, 2021       

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Not many people tend to keep the possibility of becoming disabled in the forefront of their mind. But life is unpredictable, and anything can happen which can alter your ability and affect your income. It is a known fact that disability increases as you age. The question, is are you financially prepared to protect yourself and your loved ones when you are no longer able to work?

What is TPD cover?

TPD, which is also known as total and permanent disablement insurance, is a policy that pays out a lump sum payment should you become permanently disabled which prevents you from working. What is defined as a disability will differ from insurer to insurer. Therefore, it is useful to read what is outlined in the policy you take. The general rule of thumb is that you need to be totally and permanently disabled and won’t be able to work in any occupation.

What are your chances of becoming disabled?

Australia currently has 4.2 million people that are disabled, which is 1 in 5 Aussies. Only 53% of people with disabilities have a low participation when it comes to the workspace. According to the Australian Network of Disability, unemployment rates among people with disabilities are 9.4% higher than able-bodied people.

Injuries can happen on the job or outside of your workspace, even if you do not handle heavy equipment and machinery. 1 in 6 Australians are affected by hearing loss, and an additional 357,000 people are blind or have a low vision which can affect how they perform at their occupation. These numbers are expected to increase in the next few years. Not being prepared financially can leave you exposed in a time when you need it the most.

How much will it cost?

TDP insurance is designed to be tailor-made to suit your needs. Insurers will look at various factors of your life to ensure that you get adequate cover. For example, they will assess the level of risk your occupation has, whether you are male or female, and the number of dependents you have. This is to make sure that when you make a claim you will have an adequate amount to cover your daily expenses, medical expenses, and transportation to medical facilities. Therefore, the amount you will pay will differ from insurer to insurer. This is why you will have to compare your quotes to see which one will give you value for your money.

Check the limitations

TDP insurance makes a great combination with any life insurance policy to provide you with adequate cover. However, before you apply it is vital that you check the limitations of the policy such as what it defines as a total and permanent disability. Keep in mind that you will not be able to make a claim if you are able to function and work in any occupation, even if you are running your own business from home. You can still claim if you are unable to take care of daily activities such as washing and feeding yourself.

TDP insurance is designed to ensure that you are covered financially no matter what curve balls life throws at you. You can find an affordable cover by comparing various quotes or speaking to a broker who will be able to find a solution that suits you.

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