If you are left unable to work due to personal illness or injury – whether permanent or temporary – you may be eligible to claim TPD or Income Protection. While both are different products, designed to cover different circumstances, you may actually be able to claim both at the same time!
Let us walk you through the differences between Income Protection and Total and Permanent Disability (TPD) insurance, and the situations where you may be able to claim both.
What is TPD?
Total and Permanent Disability insurance provides cover, usually in the form of a lump sum payment, if you’re diagnosed with a specified illness or injury, cannot work for 6 months, and are thereafter unable to return to any occupation in which you are trained or educated.
Essentially, if you’re likely never to return to work again due to injury or illness, you’re best off trying to claim for TPD insurance.
Remember: the definition for TPD varies from policy to policy, so always check the fine print for a list of illnesses and injuries that may pertain to the eligibility criteria.
What is Income Protection?
If you’re unable to work for a period of time due to illness or injury, you may be eligible for income protection insurance – otherwise known as salary continuance benefits. If you’re successful in your claim, you’ll be entitled to an ongoing monthly benefit of up to 75% (or up to 85%, in some cases) of your pre-tax income until you return to work.
Can I claim TPD and Income Protection at the same time?
Oftentimes, those who receive Income Protection cover also receive TPD cover. Unfortunately, many people wait years before lodging a TPD claim, because they believe that lodging a TPD claim will always end their entitlement to Income Protection. This isn’t necessarily true! In fact, we often recommend that you lodge a claim for both Income Protection and TPD cover if you believe that you’ll be out of work for an extended period of time.
However, there are exceptions. Some insurance policies will automatically stop paying Income Protection benefits to a claimant who receives a TPD benefit, and vice versa. That’s why it’s always important to discuss your circumstances with your chosen insurer or super fund before you file a claim.
Not being able to return to work because of an accident or illness can have a tremendous impact on your finances. Some of us may think that sick leave or workers’ compensation might be enough for our circumstances, but the truth is that if you’re going to be out of work for an extended period of time, it’s best to think of a more appropriate form of longer-term cover.
At Life Matters Claims, we can help manage your claim from start to finish and have a 100% success rate for all our clients’ claims to date. Get in touch to learn more about how we can help you through the insurance process.