Do I need Total & Permanent Disability (TPD) Cover?

Life doesn’t always turn out the way we plan. Illness and accidents are a reality –
and, if serious, could leave you unable to work.
How would you, your family or your business cope if you could no longer earn an income? How would you manage if you needed permanent care?

The risks

• 2.6 million Australians aged under 65 are living with a physical disability i.
• Australians suffer around 60,000 strokes per year or roughly one stroke every 10 minutes ii.
• About 88% of stroke survivors live at home and most have a disability iii.
• Over one million Australians need assistance with core activities (such as communication, transport and self-care) due to severe disability iv.

The reality
Count the number of years to your retirement. Now, multiply this by how much you earn.
If the event of permanent disability, this is the amount of money you could no longer provide for your family. Still, many Australians don’t take out insurance protection because of some common misconceptions.

“I’ll receive a disability pension”
The disability pension only provides around 20% of the average Australian wage v.

“ My TPD Cover in my default super fund is enough”
Insurance cover inside super only represents 20% of the cover required vi.

“ It doesn’t matter; I’m not the main income earner”
Child care and home help provided by a ‘stay-at-home’ spouse could be worth more than $75,000 per year vii.

What is TPD Cover?
TPD Cover provides a tax-free lump sum payment if you become disabled to the point where you can no longer work.

What do the payments protect?
Sure, you could survive on your savings – for a while. But facing permanent disability would leave very few options for you and your family to manage your future lifestyle. A lump sum payment is critical to help meet the following expenses.

• Mortgage repayments
Whatever happens, there will be funds available to
safeguard the family home.

• Day-to-day expenses
Everyday bills can really add up. Without the ability to earn, this money can help cover living expenses like food, utility payments, clothing and schooling. Musculoskeletal

 • Ongoing care
Employing a full-time caregiver is often an expensive necessity. A lump sum payment can assist with the cost as well as help with ongoing rehabilitation.

• Medical bills
This money can help pay for medical treatment that your health insurance is unlikely to fully cover.

• Home modifications
In the event of a claim, you’re likely to need modifications to your home or work environment.

i AIHW (2008) Australia’s health 2008, Cat. no. AUS 99, Canberra
ii Stroke Foundation (2011) Facts, Figures and Statistics, www.strokefoundation.com.au/facts-figures-and-stats, viewed 12 March 2012
iii Stroke Foundation (2011) Facts, Figures and Statistics, www.strokefoundation.com.au/facts-figures-and-stats, viewed 12 March 2012
iv AIHW (2008) Australia’s health 2008, Cat. no. AUS 99, Canberra
v Disability pension at 20 September 2009 is $528.50 per fortnight for a disabled spouse with children - Centrelink.gov.au.
$1,223.30 weekly ordinary times earnings, Australian Bureau of Statistics, November 2009.
vi IFSA (2005) A Nation Exposed: Investigating the Issue of Underinsurance in Australia, Research study commissioned by
IFSA and conducted by Rice Walker Actuaries and TNS Australia, Sydney
vii IFSA (5 October 2005) Australian mothers – undervalued and underinsured, Media release, Sydney