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What is Total and Permanent Disability Insurance

Total and permanent disability (TPD) insurance is a type of life insurance that provides a lump sum payment that can provide peace of mind and security in the face of severe illness or disabilities. The question of whether total and permanent disability (TPD) insurance should be taken out is a matter of individual circumstances and priorities. The claim requirements can differ significantly depending on the cover that is held so it’s important to ensure the terms and conditions of the insurance policy are understood.

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What you'll learn

Benefits of TPD insurance

TPD insurance can complement other types of insurance by providing an overall safety net as part of a comprehensive life insurance portfolio. It may provide a lump sum payment in circumstances where the insured is permanently disabled due to illness or injury, in contrast with other types of life insurance, which provide cover for death, specified serious illness or injury or temporary illness or injury where the insured is unable to work.

TPD insurance provides policyholders with a lump sum payment in the event of total and permanent disability in either any occupation, their own occupation, or Activities of Daily Living (ADL). The definition of TPD applicable to the person insured’s policy will be provided in the relevant policy document.  The lump sum payment provides the insured the ability to use the proceeds as they choose. This could include such things as repaying debts, modifying their home for accessibility and contributing towards medical costs including ongoing rehabilitation. This aids in giving peace of mind by reducing the financial burden that can come with a permanent illness or injury.

TPD insurance is not only limited to work related injuries. While workers' compensation may provide cover for injuries that occur at the workplace, TPD insurance covers a broad spectrum of injury and illnesses that result in total and permanent disablement, regardless of where they occur. TPD insurance terms and conditions can vary between insurers, so it is essential to review the Product Disclosure Statement to understand the scope, limitations and any exclusions that may apply.

Determining TPD insurance amounts

What should I consider?

The level of TPD cover depends on individual circumstances and priorities.  Below are some costs to consider when deciding how much TPD to apply for:

  • Outstanding debts
  • Replacement of lost income
  • Potential housing modifications required for rehabilitation or disability.
  • Day to day living expenses.
  • Paying for children's education
  • Reskilling
  • Consider existing TPD cover in your superannuation.

Once the above figure has been determined there may be the possibility of reducing this by exploring any existing cover already in place or what assets may potentially be sold.

Structure of your TPD insurance cover

There are different ways to structure TPD cover to suit specific needs, budget, and personal circumstances. TPD insurance can be structured as a stand-alone policy or as a linked policy, also known as a rider benefit. For example, to a life insurance policy that provides a death benefit and/or a critical illness benefit.

A stand-alone policy is separate from other life insurance policies. If a claim is made on a stand-alone TPD insurance policy, it will not directly impact the benefit amount or ability to claim on other life insurance policies. However, stand-alone TPD insurance policies are generally more expensive than the same TPD insurance cover provided under a linked policy.

Making a TPD Claim

When making a claim on TPD, eligibility criteria must be met which will include the relevant occupation definition as well as policy definitions of permanent disability. This process may include providing supporting medical evidence to the insurer.  Engaging with the TPD insurer during the claims process may help ensure that all required documentation is provided, which may assist in reducing the process times of any claim.

Total and permanent disability cover is a key component of financial planning and risk management. TPD insurance may provide a lump sum amount to help reduce the financial burden for whatever life may bring.


To find out more about TPD insurance – visit the TAL website. The information you provide on the TAL website will be subject to TAL’s Privacy Statement and Privacy Policy, available on their website.

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Things you should know

Any financial product advice provided on this website is of a general nature only and does not take into account your personal circumstances. Westpac refers customers to TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life), the issuer of life insurance policies. TAL Life is part of the TAL Dai-ichi Life Australia Pty Ltd ABN 97 150 070 483 group of companies (TAL). If you purchase a life insurance policy as a result of a referral from us, Westpac will receive a commission of 10% of your premiums (exclusive of GST) for the period you continue to hold a policy.

Before purchasing life insurance, you should read the Product Disclosure Statement (PDS) and the Target Market Determination (TMD) to help you decide if life insurance is appropriate to your objectives, circumstances and needs. You can obtain the PDS and TMD from TAL’s website or by calling TAL on 1300 345 620.

By accessing TAL’s website, you will enter a third-party site not owned by Westpac. Any personal information you provide to TAL's website will be collected, used, and disclosed in accordance with TAL's Privacy Statement and Privacy Policy, also available on their website. 

If you would like help deciding whether life insurance is right for you, we recommend speaking to a financial adviser.