Under the TPD insurance cover I’m looking at I have the option of choosing a cover that either protects me if I lose the ability to work in my own occupation or work in any occupation. What is the difference and what should I choose?
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Answer by Neha Sharma, Hillsdale 2036 NSW
- Only a few insurance companies allow a person to choose the type of cover they want under a TPD insurance policy.
- Generally companies only offer ‘any’ occupation cover.
- The insurance premium is usually higher for ‘own’ occupation cover.
- Losing the ability to work in your ‘own’ profession means that as a consequence of an incident, illness or injury the life insured has permanently lost the ability to work in the profession they ordinarily work in. For example a bus driver who permanently loses their legs due to illness or injury also loses their ability to work in their profession as a bus driver.
- Losing the ability to work in ‘any’ profession means that as a consequence of an incident the life insured permanently loses the ability to work in ‘any’ profession for which they are qualified by education, training or experience. For example if a bus driver was also a qualified teacher they may be able to purse work in that profession after losing the ability to work as a bus driver.
- Losing the ability to work in your ‘own’ profession offers a better level of protection as it will provide the bus driver in the examples above with benefits under the insurance policy regardless of whether they can work as a teacher. The benefits may be useful to pay for:
- medical costs;
- home modification costs; or
- repayments of debts.
- You should read the product disclosure statement and the definitions of key terms under the policy very carefully and get legal and financial advice if you are unsure about anything.