Permanent Disability Insurance

These insurances are grouped as they share a similar feature – they pay a lump sum amount either to yourself or your estate in the event of a trigger, the trigger may be that you die, become badly injured or suffer a trauma event like heart attack or stroke.

Each is a little different. First is Life insurance, then Total and permanent disability and finally trauma.

Life

Term life insurance is a universal type of life insurance policy, which provides your family with cover in the event of death or a diagnosed terminal illness.  Terminal illness is when a specialist in the relevant area of medicine classifies a sickness or injury as highly likely to lead to the death of the insured within twelve months. Generally this cover would provide for funeral costs, lifestyle for the remaining family members and outstanding loans.

Remember, a luxury enjoyed very soon becomes a necessity.  This means that if your family is accustomed to a certain lifestyle, why should that lifestyle have to change if you or your partner dies?  Your lifestyle can be protected with life cover.

If you run a business, term life can be used as cover for key individuals (keyman insurance).  Keyman insurance is where the owner of the policy is the company, and cover is taken out on a key person in the business.  This cover can be used to replace the deceased key person, cover for lost revenue or pay off debts of the firm.

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Total Permanent Disability

TPD insurance provides a lump sum payment in the event that you are deemed to be permanently and totally disabled and unable to ever return to the workforce.

Important Definitions

Two important definitions regarding being unable to return to work are:

  • Any Occupation - where you are incapacitated such that you will never be able to recommence work in any occupation suited to you by education, training, and experience, or
  • Own Occupation - where you have been unable to work for six months and are incapacitated such that you will never be able to work again in your own occupation.  Premiums for this type of insurance are more expensive than for any occupation insurance.

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Trauma

Trauma insurance can provide a lump sum benefit of up to $1.5 million upon diagnosis of a specified condition such as cancer, stroke or heart attack – where the insured survives at least 14 days after diagnosis.  Most life insurance companies specify that survival must be without life support. 

Trauma insurance is available to people who commence the policy before age 55 and ceases at age 65.  It covers a person in the event of a major one off event, preventing a person returning to work for a period of time.

Trauma insurance covers major events including:

  • Alzheimer's disease
  • Blindness
  • Cancer
  • Chronic lung disease
  • Coma
  • Deafness
  • Heart attack
  • Kidney failure
  • Loss of limbs
  • Major head trauma
  • Organ transplant
  • Multiple sclerosis
  • Paraplegia
  • Parkinson's disease
  • Severe burns
  • Stroke


Cover for these events are usually subject to a 90-day waiting period.  That is, the policy must have been in place for 90 days before a claim can be made.  Certain events will be excluded including, death within 30 days of the event, deliberate self inflicted harm and injuries arising from an act of war.  Some policies also offer a buy-back feature.  This allows the insured to take out life insurance cover after a trauma.  If the insured has lived twelve months after a trauma claim was made they may take out life cover within 60 days of becoming eligible.  This is useful as many people who have suffered a health trauma may have difficulty qualifying for insurance at all.

Please contact us to discuss as we are both qualified and licensed to discuss and place your insurance.

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