Protecting and helping families since 1985

Total & Permanent Disablement Insurance

1. What is Total & Permanent Disablement Insurance?
2. Own Occupation vs. Any occupation
3. Who needs TPD benefits?
4. How much does Total & Permanent Disablement cost?

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1. WHAT IS TOTAL & PERMANENT DISABLEMENT INSURANCE?

TPD is a tax-free lump sum benefit payable when you have an illness or injury that results in you becoming permanently disabled.

This benefit is paid regardless of any other income or Govt benefits you may be entitled to.

Simply put – if you are employed; the question asked to determine if you are permanently disabled is; “Will this person ever be able to return to work?”

If you are unemployed then the question asked is; Is this person unable to perform 2 of the ‘Activities of Daily Living’ ?

Total & Permanent Disablement Insurance

‘Activities of daily’ living means;
1. Dressing – the ability to put on or take off clothing
2. Toileting – the ability to use the toilet including getting on or off
3. Mobility – the ability to get in or out of a bed and a chair
4. Feeding – the ability to get food from a plate into the mouth
5. Bathing and showering – the ability to bath & shower yourself.

NB; Assessment of whether you are permanently disabled is delayed for 3 months (recent policies) or 6 months (older policies) meaning NO benefit is paid until 3 months after the disability – at the earliest.

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2. ‘OWN’ OCCUPATION vs ‘ANY’ OCCUPATION DEFINITION

Depending on your occupation type you may be able to choose ‘Own Occupation’ definition for determining if you are permanently disabled.

This means the question asked to determine if you are permanently disabled is; “Has this person become incapacitated so as to render it unlikely that they will ever be able to resume their own occupation or profession?”

If you choose ‘Any Occupation’ definition (it’s cheaper) or are required to have this definition because of your work duties, the question becomes; “Has this person become incapacitated so as to render it unlikely that they will ever be able to resume their own occupation or profession, or any occupation or profession for which they are suited by education, training or experience?”

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3. WHO NEEDS TOTAL & PERMANENT DISABILITY BENEFITS?
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Everyone needs TPD, but especially people whose earnings (or lack of earnings) might prevent them receiving any or only low ACC income benefits.

Remember, if it’s an accident ACC doesn’t pay lump sums anymore and you can’t sue for money to help remodel a house, get home help or just give you some dignity and compensation.

And, if it’s an illness that causes your disablement you’ll only get the “sickness benefit” …ouch !!

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4. HOW MUCH DOES TOTAL & PERMANENT DISABLEMENT COST?

Total & Permanent Disablement Insurance
Mental Health claims are the major cause of disability claims in females at 26%, and overall 72% of claims were for illnesses.
(Source: Tower Health & Life 2009)

Total & Permanent Disablement Insurance
Accidents are the major cause of disability claims in males at 37%, this means that 63% of claims were for illnesses.
(Source: Tower Health & Life 2009)

(these are approx prices for a person in good health)

Prices assume the benefit is Accelerated as part of a package.

If you were to insure $250,000 and you are a non smoker;

30 yr old male, desk work  = $3.77pm  (female = $3.43pm)
30 yr old male, tradesman = $5.66pm
40 yr old male, desk work  = $8.90pm  (female = $11.50pm)
40 yr old male, tradesman = $13pm
50 yr old male,  desk work = $35pm    (female = $45pm
50 yr old male, tradesman = $53pm

NB: These prices are indicative only. Even if you are a 50 year old male tradesman, the price can vary greatly between companies; and remember the ‘Acorn’ guarantee to get you the best price possible and beat any written quote you already have !!

DISCLAIMER; These explanations and comments are general in nature only. You must refer to the appropriate policy document wordings for full and complete understanding.
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“I called on Mike to get a better deal on my insurance, both in cover and for a lower cost. Over the past 8 years he has answered all my enquiries promptly, without bias, and in my best interest. I highly recommend Mike as he gives a great service”
– Alan Trenberth, Christchurch

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