Total and permanent disability insurance: Things to know
Life can be unpredictable, and sometimes an injury or illness can leave us unable to carry out everyday activities. This is where cover such as total and permanent disability insurance (TPD) could offer protection to individuals, in the event you suffer a lifelong disability.
What is total and permanent disability insurance?
Depending on the circumstance, total and permanent disability insurance can offer a payout should you suffer a lifelong disability that stops you from being able to look after yourself or those you love.
For example, if you were to suffer blindness, the loss of limbs, or a mental impairment you could be covered by TPD insurance. Plus, most insurance providers will let you determine how much you’re covered for, so you could be eligible for a payout of tens of thousands, or even up to a million dollars, depending on your policy.
Understanding the cover provided by TPD insurance
Like with any insurance policy, it’s good to have a strong understanding of exactly what you are covered for.
In the case of total and permanent disability insurance, you will typically be covered if as a result of illness or injury, you:
- Suffer the loss of limbs
- Lose your sight
- Are unable to work
- Suffer the loss of an independent existence
Policies will vary from one insurance provider to another, so it’s important to read your policy document carefully so you know exactly what’s covered (and what isn’t).
Who is eligible for total and permanent disability insurance?
TPD insurance is typically available for those who meet select criteria.
Generally, you must:
- Be a New Zealand resident
- Be aged between 16 and 59 years old
- Work at least 20 hours per week (or for homemakers, work less than 10 hours per week in paid employment)
Again, these criteria can vary from one insurance provider to another.
How the TPD claims process works: step-by-step guide
Should you need to make a claim, the first step is to get in touch with your insurance provider for a brief chat about the process. They will confirm what you need to do so you have clarity about how to move forward.
The process typically goes along the lines of the below steps:
- Contact your insurance provider
- They will send you a form to fill out, sign and return
- You will most likely be asked to have your doctor or medical specialist fill in a form
- You will need to lodge your claim within a certain timeframe – often 120 days of the insured event for the claim to be valid
- You may be asked to undergo testing or a medical examination
- Claims will be paid out to you upon approval
Common exclusions in total and permanent disability policies
Insurance is a contract between you and your policy provider, and it is based on a principle of good faith. That said, there are often exclusions for some types of cover.
Policy providers will typically exclude you from coverage if your injury was caused or accelerated by a self-inflicted intentional act, or by someone who could also gain from your benefit payment.
They might also reject a claim where they have agreed a special term with you in respect of your cover that specifically excludes the event or condition leading to the claim. Be sure to read your policy document to see if there are any other exclusions you need to be aware of.
OneChoice provides comprehensive solutions to protect you and your family against life's uncertainties, including Total & Permanent Disability Insurance as an optional cover with OneChoice Life Insurance policies. Discover more and request a quote today.
5 Feb 2025