Total & Permanent Disability (TPD) Insurance
Optional cover if you become totally and permanently disabled.
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What is Total & Permanent Disability (TPD) Insurance?
Total & Permanent Disability Insurance, also referred to as TPD Insurance, provides a lump sum payment if you become totally and permanently disabled and are unable to work again due to illness or injury. It helps cover medical expenses, rehabilitation, and necessary lifestyle changes to support long-term financial stability.
With Real Life Cover for SMSF, the maximum age you can apply for TPD Insurance is 59, and cover can remain in place until the policy anniversary following your 65th birthday.
What does TPD Insurance cover?
If you suffer cognitive impairment, loss of limbs or sight, loss of independent existence, or are unable to work which results in you becoming totally and permanently disabled, you will receive the Total & Permanent Disability benefit. Each of these are defined within the PDS and if you lodge a claim, your condition will be assessed against these definitions.
Here are a few things a TPD Insurance payout could cover:
- Medical and rehabilitation costs: The lump sum payout can help cover ongoing medical treatment, therapy, and rehabilitation expenses.
- Living expenses: It can support daily living costs for you and your family if you’re no longer earning an income.
- Debt repayments: The benefit can be used to pay off debts such as a mortgage, personal loans, or credit cards.
- Long-term care: If your disability requires changes to your home or long-term personal care, the payout can help fund these adjustments.
What’s not covered
Real Total & Permanent Disability Insurance does not cover certain situations and conditions. Here are the key exclusions:
- Intentional acts: Disabilities caused or accelerated by an intentional act performed by you, the life insured or a person entitled to receive a claim payment are not covered.
- Special Terms based upon your health and lifestyle: If the insurer excludes an event or condition leading to a claim your claim may be denied.
- Non-permanent conditions: Injuries or illnesses that are not classified as total and permanent under the policy’s definition will not be covered, even if they are serious.
- Hazardous occupations: If your job is considered high-risk, certain benefits may be excluded or limited based on the insurer’s assessment.
- Policy expiry: Cover ends on the date of your death, the policy anniversary following your 65th birthday, the date a claim has been paid out or if you cease to be a member of the SMSF.
Always read the Real Life Cover for SMSF PDS for the full list of exclusions and definitions specific to your policy.
Some things you should know
- The intent of the policy is to cover you in the event that you suffer an injury or illness that is so severe that you will remain totally and permanently disabled and are unlikely to ever be able to work again in any occupation suited to your education training and experience.
- The benefit amount you can be covered for and the ability to add optional Total & Permanent Disability Insurance to your Real Life Cover for SMSF policy are dependent on your circumstances.
- There are a number of exclusions to this policy, including that any condition caused or accelerated by an intentional act will not be covered. You can read more about the exclusions in the Product Disclosure Statement.
- This cover expires on the policy anniversary following the insured’s 65th birthday.
For more information about Real Life Cover for SMSF optional Total & Permanent Disability Insurance, read the PDS.
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Frequently asked questions
Is a TPD payout taxable?
A TPD benefit pay-out is generally not taxed. However, it's always best to check with a tax professional.
Should I have my Total & Permanent Disability insurance inside or outside super?
Most super funds offer life insurance, but with generally only a minimum level of cover in the event of death or TPD. You should ensure this cover will be enough for your needs, should you need to claim.
I already have life insurance. Do I need TPD cover too?
Life insurance provides a lump-sum payout if you die or are diagnosed with a terminal illness. TPD provides a lump-sum payment if you can’t work because you are totally and permanently disabled.
How are the TPD Insurance payouts paid?
The TPD Insurance benefit payout is paid as a lump sum if the life insured suffers a total and permanent disability while covered under the policy. This one-time payment is made after the claim is assessed and approved, and it can be used at your discretion, for example, to cover medical expenses, repay debts, or support long-term living costs.
How do I make a TPD Insurance claim?
To make a TPD Insurance claim, you’ll need to have your condition certified by two medical practitioners or specialist medical practitioners. In some cases, the diagnosis may also need to be confirmed by Real Insurance medical advisers. For full details and to start your claim, visit the Real Insurance claims page.