TPD – what does it mean?

TPD stands for Total and Permanent Disability insurance. TPD insurance can provide you with a lump sum of money should a disability resulting from injury or sickness prevent you from being able to work again.

Regardless of whether the disability is caused by sickness or accident, provided the disablement is both permanent and total, the insurance will pay the agreed defined benefit.

The benefit paid can be used by you for any purpose you choose. For example, to assist with medical expenses not covered by Medicare or private health insurance, to allow you funds to modify your home to assist with your condition or simply to pay off some debt (such as your mortgage) as part of a strategy to assist you in achieving a financially secure future.


With the advances in modern medicine, it is great to know that many people that suffer from terrible illnesses go on to make a full recovery after several months or years, some requiring ongoing medical treatment and others not.

It would be shocking for a sufferer to have to undergo all of their treatment and spend all of their savings (and possibly borrow from family and friends) to fund treatment and the like only to survive only to then be crippled financially as a result and never really get ahead again.

Appropriate TPD cover can minimise any financial hardship and allow you to get your life back on track after a traumatic experience.


There is a very important distinction between “any occupation” policies and “own occupation” policies. As these policies cover you for when you cannot work, the insurer wants to know what type of work you do so it can determine their risk and therefore the premiums you will pay.

An “any occupation” policy will only pay out when you are unable to perform any work at all (even other less strenuous jobs) whereas an “own occupation” will pay out when you are unable to undertake your usual occupation (so that you would not have to obtain inferior employment).

Many insurance policy add-ons in industry superannuation funds are of the “any occupation” type, which is the less useful but cheaper of the two types of policies. Often people assume they have adequate benefits when in industry funds however, sadly they find out the hard way that the cover was not what they expected it was. This is where proper advice from a qualified financial advisor could have assisted.


We would need to discuss with you the amount of cover you may need and provide quotes but it doesn’t cost as much as you might think to have peace of mind in knowing that your immediate financial future is secured.

Although different insurers might charge different premiums for similar products, we only recommend quality insurers that carry out “underwriting” up front. This is where the insurer considers your full medical history before deciding to insure you – the point being that if they have done this, a claim is unlikely to be rejected on your death. The insured has a duty of full disclosure and less reputable insurers can reject claims on the basis of non-disclosure.


For more information on personal insurances and the types of cover that are suitable for your needs or those of your business, please contact Fionne McKillop at McKillop Financial Planning on (02) 9542 2904 or email

Fionne McKillop is principal financial planner at McKillop Financial Planning and owns her own law firm McKillop Legal, which is expert in estate planning, business succession and commercial law.


Content contained within this site and any related sites including, but not limited to, our Facebook page, Twitter profile and any LinkedIn profiles of our financial planners is general information only and is not advice, financial planning, legal or otherwise.

This article was prepared by Integrated Planning Systems Pty Limited ABN 21 051 429 184 trading as McKillop Financial Planning, an Authorised Representative of GWM Adviser Services Limited ABN 96 002 071 749 trading as MLC Financial Planning, Australian Financial Services Licensee, 105 – 153 Miller St, North Sydney NSW 2060, a member of the National Australia Bank Group of companies. The information is current as at 9 September 2016.

The article does not take into account your personal objectives, financial situation or needs. Accordingly, you should consider how appropriate the information is to you with regard to your personal circumstances. You may wish to obtain an adviser’s assistance, tax and/or legal advice to make this assessment. Before buying any financial product, you should read the Product Disclosure Statement (PDS) for that product and consider the contents of the PDS before making a decision about whether to acquire the product.
Opinions constitute our judgment at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia Group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility of errors or omissions for this document.

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