How much TPD cover do I need?
Total and Permanent Disability Insurance provides a benefit should you become permanently disabled and unlikely to ever return to work. Having the right amount of cover for your needs is crucial: too little can result in a nasty surprise if you need to claim, while too much means you could be paying more than you need to.
So how do you know how much TPD cover you need? The answer depends on your personal circumstances, which can include five key categories: income, mortgage, debts, dependents and medical and rehabilitation costs. Let’s take a closer look.
What is your current income? To what extent do you and your family rely on this income? Could your family cope if that income stopped coming in? How would your lifestyle change? You may also want to consider taking out Income Protection insurance, which can provide you with up to 75 precent of your income if you are unable to work and is an extra level of protection for you. Even if you don't earn an income, your total and permanent disability can have a big impact on your household. If you were no longer able to perform key daily duties, like cooking, cleaning and driving, how would you and your family's life change? Having a TPD policy can give you choices and options.
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What mortgage repayments do you have? You don’t want to risk losing your home or putting your family under financial stress if you were unable to make your mortgage repayments.
What debts do you have? Perhaps you have a car loan? Credit cards? These all need to be considered when choosing your level of TPD cover.
Costs of raising children
The number and age of children that you have will be an important consideration when choosing TPD cover.
How independent are they? Do they rely on you fully, or can they take care of themselves financially? Will they need financial assistance to get through school or university?
Costs of rehabilitation
With a total and permanent disability there may also be house modifications and rehabilitative care required. It’s important to consider what cover you may need to help you adjust to your new lifestyle after claim.
This can seem like a lot to consider, which is why we have built our Life Insurance Calculator that can help you understand what level you may need.
When you know what level of cover you’re looking for, our comparison tool can help you compare TPD insurance options and the different features and benefits available.
Our team of specialists are ready to help, just call 13 54 33 to discuss your requirements in more detail.