All insurance companies I have approached in the past month have insisted I take out a TPD insurance cover with the life insurance. I am sceptical about paying an additional $20 a month for this policy but have read numerous case studies where it has proven to be useful. Should I take out this insurance and how much insurance is sufficient?
Lawyer Answers (1): Answers from lawyers are general preliminary responses. They are not formal legal advice and cannot taken account of all your circumstances. They do not create a lawyer–client relationship.
Answer by Neha Sharma, Hillsdale 2036 NSW
- You should always seek expert financial advice when considering taking out any insurance policies.
- TPD insurance can be useful as it offers financial protection to the life insured if you suffer permanent and total disability. For example TPD insurance may be payable if:
- a person loses their legs as a result of being in a car accident and can no longer work; or
- a person permanently loses their ability to maintain an independent existence as a result of being in an accident. This can include things like losing the ability to carry on daily activities such as:
- moving;
- eating and drinking; or
- using a toilet.
- In the absence of TPD insurance a person may find themselves in a position of financial distress particularly if they are unable to:
- maintain a livelihood;
- pay off debts; or
- afford home modifications necessary to accommodate the injury they have suffered.
- The level of TPD cover a person should take out depends on individual circumstances and a financial adviser should be able to assist you in this regard.