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Total and Permanent Disability (TPD) insurance pays a lump sum if you become totally and permanently unable to work — either in your own occupation or any occupation depending on your policy definition. The payment is designed to cover rehabilitation, debt repayment, home modifications, and long-term care costs.
Own occupation TPD is the more generous definition — it pays if you can no longer perform the duties of your specific job. A surgeon who loses the use of their hand would qualify under own occupation even if they could theoretically work in another role. Any occupation TPD only pays if you are incapable of working in any job suited to your training and education — a much higher threshold to meet. Own occupation cover cannot be held inside superannuation.
No. TPD pays a one-off lump sum if you are permanently disabled. Income protection pays a monthly benefit while you are temporarily or permanently unable to work, stopping at age 65 or when you recover. They serve different purposes: TPD handles the capital costs of permanent disability (debt, home modifications, long-term care), while income protection replaces the monthly income stream. Most financial advisers recommend holding both.
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