What is Total and permanent disability cover?
This Total and permanent disability (TPD) policy can help make sure that the business can have the financial support to help make the right decisions for the future. For example, if a transfer of shareholdings is needed if the insured person become totally and permanently disabled and are no longer able to work in the business. You can take it with Life insurance or take it as a stand-alone.
- Entry age for the insured person is from age 16 to 64.
- Your insurance ends at age 100, if you keep paying your premium.
- You can pay fortnightly, monthly, quarterly, half-yearly or yearly.
- You can choose to help protect your cover against inflation by having the amount you’re insured for increase each year.
- There are two types of payments; age-rated payments fixed for one year at a time, and normally increase in line with age, OR level term payments which are fixed for the life of the policy.
- Talk to an adviser about the right amount of cover for you.
- You can have TPD cover as a standalone product or added as an accelerated benefit that’s taken from your Business life cover policy – ask us how.
More about Total and permanent disability cover.
- What is it?
- Why should you get it?
- What’s the deal?
- Anything else?
What is it?
TPD is paid out if the insured person becomes totally and permanently disabled and are unable to work.
Why should you get it?
Well the responsibilities, debts and bills won't stop even if you or a key person can’t work – and the future of your business might be at stake.
What’s the deal?
You pay an amount of money (called a ‘premium’) for a policy. The policy is a contract so you know exactly what we’ll pay out for. If you keep paying for your insurance with us, and the policy terms and conditions have been met, we’ll pay out for everything we agreed.
You’re insured even after retirement age so that if you are still working in your business – your policy keeps working for you. It’s important to note though that if you’re not working, or you’re over the age of 70, the definition of what totally permanently disabled means does change. Take a look at the info sheet for more details.
With business growth comes increased risk. You can increase the value of a person’s cover when certain financial changes happen in the business before the age of 55 without needing to give us medical evidence (check out the TPD info sheet for details as there are a few conditions).
Questions? Start here.
We’ve compiled a list of the most commonly asked questions about this cover.
For a good overview of the ins and outs, it’s worth reading the factsheet.
Yes - you’ll need to be between 16 and 64 if you want this cover.
Your cover extends past retirement age – and will only finish up once you turn 100. It is important to note that the definition of what is considered to be totally permanently disabled does change, depending on your working status and duties.
You can also choose to inflation-proof your policy by having the amount you are insured for increase each year.
You can pay fortnightly, monthly or annually – whatever works best with your budget.
At the start of the policy you can choose whether you want your premiums to increase each year (called Yearly Renewable Term) or be fixed for the life of your policy (called Level Term).
With Level Term, the premiums start out a bit higher than yearly renewable, BUT the amount you pay remains the same for the term of the policy.
With Yearly Renewable Term, your premium increases each year based on things like your age, gender and smoker status. You’ll receive a note letting you know your adjusted premium.
A combination of Level Term and Yearly Renewable Term can help provide flexibility and certainty.
Ask your adviser about this, or give us a call.
What happens if I add my TPD cover to my Life insurance (also known as 'Life assurance' or 'Life cover')?
You can choose to have your TPD included as an ‘accelerated benefit’ (which means it’s deducted from your total Life insurance cover amount), or as a ‘standalone benefit’, which won’t reduce the total amount in your Life insurance cover (basically, if you choose this option, the amount in your Life insurance cover doesn’t change.)
If you choose to have your TPD cover paid as an accelerated benefit, you can choose the optional extra of buying back the amount that’s deducted from your Life insurance if you’d like.
There are certain events where you can increase your Life insurance without the need for more medical evidence up until you reach 55. With Life insurance for business there’s a benefit automatically offered under your policy which allows you to increase up to certain limits should the person’s value to the business, their financial interest in the business, or loan guarantee increases. If you’re likely to need more cover in the future than what this benefit offers, you can also take out the Business Future Insurability Option. The info sheet will explain these in more detail.
Why choose Fidelity Life.
* Fidelity Life has an A- (Excellent) financial strength rating from A.M. Best. The rating scale that this rating forms part of is available for inspection at our offices. For more information please visit Fidelity Life's financial strength page.
Disclaimer – the information contained in this webpage is a summary of the key points of this insurance policy and is general in nature. It is not, and is not intended to be, a policy document.
Details of definitions, benefits, standard exclusions/limitations, terms and conditions are contained in the full policy documentation which is available from your financial adviser. Please refer to current policy documents for specific details. This webpage does not provide a personalised financial advice service.