TPD Insurance, or total and permanent disability.
TPD is basically a lump sum of insurance that is paid out to you in the instance where you are deemed by a doctor to never be able to work again.
When working become impossible…
So it has to be pretty serious. In most cases, this would be some kind of permanent disability like quadriplegia or a very serious degenerative disease that eventually incapacitated you.
However there are also mental health conditions so severe that working becomes impossible.
Every time I talk about insurance, it’s a little bit dismal, but it’s important so that’s why I do it.
While you are healthy
The fact of the matter is, if you cover yourself now – while you’re healthy – you totally don’t need to worry about it ever again.
You can rest easy knowing that everything would be okay financially no matter what happened.
If you’ve got income protection, you might be thinking that you don’t need TPD as they kind of cover the same thing.
But just remember that income protection only covers 75% of your previous salary.
That’s still a 25% gap year, on year, that you need to take a hit on.
This is where TPD comes in.
A lump sum received early could help you pay out your mortgage or other debts, and set you up so that the 75% income protection payments are more than enough to keep you going.
There are different insurances for a reason and they all have a different purpose.
Even though it can seem a little overwhelming initially, they’re all equally important and a comprehensive insurance package for anyone includes Life Cover, Trauma Cover, Income Protection and TPD.