Our path through life often resembles a winding road with many twists and turns. We set out the direction with clear destinations in mind but fail to anticipate complications along the way. What happens if our professional and personal lives face permanent disruption as a result of a permanent disability?
Total and Permanent Disability (TPD) insurance is a lever you can pull to provide financial support if you become permanently disabled from a serious illness or injury and unable to work or unable to perform activities of daily living.
It offers a lump sum payment that can help cover medical expenses, mortgage or rent payments, home modifications, caregiver employment, and other bills that may arise from disability. Here’s a closer look at what TPD offers:
- Pays out a lump sum at a time when you become totally and permanently disabled and are unable to ever return to work.
- Helps to cover your lifestyle costs when you have additional expenses such as therapy and medical treatment.
- Provides non-occupational coverage for those without paid employment, such as stay-at-home parents or volunteer workers.
When the bills keep coming, TPD can be the safety net that allows you to focus on your recovery and transition into your new life without added financial stress.
Common claims with TPD cover
Here are some common conditions that lead to TPD claims:
- Neurological disorders – such as a traumatic brain injury or a stroke
- Cancer diagnoses – that lead to permanent disability
- Musculoskeletal injuries – through car accidents, sporting or workplace incidents
TPD cover in action
Below are a couple of scenarios of where some New Zealanders could benefit from having TPD cover.
- Samuel worked as a criminal defence lawyer for around 20 years. He suffered a stroke during a walk with his wife on a sunny Sunday morning.After six months of rehabilitation, it became apparent to his medical team that his short-term memory wouldn’t fully recover which, in turn, removed his ability to return to work. After satisfactory medical evidence was submitted from his rehabilitation team to his insurance provider, he received his TPD claim which helped him cover his expenses during the transition into a different line of work.
- Jo-anna was a hairdresser for over 20 years. Her job brought her happiness and purpose as she was able to form meaningful relationships with her clients. After a traumatic car accident, Jo-anna suffered permanent nerve damage in her right arm, which resulted in loss of function in her right hand. Due to the loss of function, she resolved to the fact that she could no longer continue as a hairdresser. She supplied medical evidence to her insurance provider which satisfied the need to claim on her TPD benefit.
Protecting purpose and meaning in your life
It’s not just the financial impact that a life-altering injury or illness can bring when your career ceases, but the emotional and psychological impact. Many aspects of our lives bring us purpose and meaning, which a permanent injury or illness may severely impact.
Your career contributes to your financial livelihood, but also allows you to build a meaningful community and make life-long friendships. You may also find fulfilment through your hobbies and volunteer work. Removing this suddenly and without a safety net in place can be immensely challenging to deal with.
TPD Coverage not only helps to take care of the financial aspects and transition into your new normal, but it allows you the time and space to search for that new, adjusted sense of purpose when your previous hobbies or activities are no longer possible.
The fine print – Where TPD coverage may not apply
TPD can be useful in many circumstances, but some exclusions may apply. Your policy may not include pre-existing medical conditions or pre-diagnosed disorders. Some insurance providers may also exclude injuries or conditions that result from intentional self-harm.
Providers may also refuse to cover those who work in high-risk jobs, such as the armed forces, police, prison guards, firemen, and more. There are also often exclusions based on dangerous hobbies, such as motocross, rock climbing, or scuba diving beyond 40 feet.
Because your insurance needs are unique to your situation and terms and conditions vary between each provider, it’s essential you discuss your needs with a qualified Financial Adviser to ensure your TPD policy is fit for purpose.
How AdviceFirst can help
It’s natural to hope for the best, and when we’re living our best lives, preparing for the unexpected can seem counterproductive.
Total and Permanent Disability insurance helps safeguard your financial progress as you navigate life’s unexpected turns.
If you find that choosing between the myriad options available is overwhelming, we recommend you build your plan with the help of a Financial Adviser.
An AdviceFirst adviser can help guide you through insurance labyrinth, building a protection plan that suits your needs and lifestyle.
If you’d like to review your current insurance plan and ensure it’s still fit for purpose, please get in touch with us to book an appointment with one of our expert advisers.
To learn more, call us on 0800 438 238 or email hello@advicefirst.co.nz.
Disclaimer: This blog is for informational purposes only and does not constitute individual financial advice.
