How Is TPD Insurance Different from Income Protection Insurance?

18 May 2023 | Superfund Insurance

The majority of Australians are covered by TPD insurance. Most people have Total and Permanent Disability cover through their employer’s super insurance, although it may also be purchased individually as part of life insurance or a different type of cover.

Both TPD insurance and a separate policy known as income protection insurance help you protect your finances if you are unable to work as a result of a disability. However, there are some key differences between the two that are important to understand.

To understand your insurance cover and to get assistance making a claim or claims, call TPD Compensation Lawyers at 03 9966 7188 today. We handle all claims on a No Win, No Fee basis, which means there is no cost to you until we resolve the matter favourably.

What Is TPD Insurance?

Total and Permanent Disability is the sole focus of our firm. Our specialist lawyers help people apply for TPD entitlements when they become completely unable to work as a result of a disability.

If an injury or illness makes it so you can’t work at all and you are not expected to be able to resume employment, you can lodge a TPD claim. Strong, compelling medical evidence of Total and Permanent Disability must be provided. Your entitlement rests on whether the insurer determines that the disability prevents you from doing your job (‘own occupation’ coverage) or any job (‘any occupation’ coverage).

Check your TPD insurance policy to learn how disability is defined and what amount the full benefit entails. If you are offered less than the full benefit, you should speak to an expert lawyer as soon as possible.

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What Is Income Protection Insurance?

Employees in Australia may also have income protection insurance through an employer or other cover. Income protection insurance replaces a portion of your earnings for a time if an injury or illness prevents you from working.

Both policies can be used to cover the expenses that you have as a result of your disability, such as medical bills or modifications to your home. They can also be used to replace your income, so you can continue to support yourself and your family.

However, there are also several important differences between TPD insurance and income protection insurance that you need to understand:

Waiting Period

  • Income protection: You will usually need to wait 30–90 days before applying.
  • TPD: TPD insurance has a longer waiting period—usually between 3–6 months.

Type of Disability

  • Income protection: Available to those with a total OR partial disability.
  • TPD: Only people with a ‘Total and Permanent Disability’ (as defined by the insurer) qualify.

Type of Benefit

  • Income protection: Monthly payments based on earnings prior to the incapacitating injury or illness.
  • TPD: One-time lump sum payment.

Length of Cover

  • Income protection: Payments may be limited to a certain number of years (usually 2–5) or until the claimant reaches a certain age. Often, this is close to the age of retirement (60–70 years).
  • TPD: Not applicable; only one payment is made. However, the lump sum entitlement may be substantial, enabling claimants to cover expenses for the rest of their lives.

Although income protection and TPD insurance may be provided by your employer, it is important to note that an illness or injury that results in disability does not need to be work-related for you to qualify for either form of cover. Both policies are distinct from workers’ compensation (a separate insurance cover specifically for employees who are injured or get sick as a result of their work).

Can I Get Income Protection and TPD?

Yes, you may be eligible for both income protection payments and the TPD benefit. TPD Compensation Lawyers can review the available insurance cover and advise you of your entitlements.

Often, people with a disability will first apply for income protection insurance to make up for part of the earnings they lose from being unable to work. If the disability persists and it is determined that you no longer have the capacity for work, a specialist lawyer can help you lodge a TPD claim.

Generally speaking, your entitlement to income protection insurance does not end if you are paid a TPD benefit. However, all insurance policies need to be reviewed carefully to understand the terms of cover and your right to continued income protection and any additional payments you may be due.

We Understand TPD Insurance

A physical or psychological disability can turn your life inside out. People who were gainfully employed may find themselves unable to work because they get hurt or fall ill.

TPD Compensation Lawyers can help if you and your family are facing this situation. We specialise in helping people with disabilities obtain the maximum payout. Our principal focus is the TPD benefit, but we can explore income protection insurance and other entitlements that may be available to you.

For assistance navigating a TPD insurance matter, contact TPD Compensation Lawyers today.