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Total and Permanent Disablement Insurance – AIA Australia Life Insurance and Income Protection

Imagine what would happen if you were to suffer from an injury or illness that left you unable to work ever again. The financial effects would be similar to what would have happened if the injury or illness had resulted in your death. So what’s the difference?

When you’re totally and permanently disabled, your family’s financial requirements don’t change. You still need to pay your rent or mortgage, cover medical bills, provide for your children’s education, and keep up with the rising cost of inflation. When you’re totally and permanently disabled, your family won’t have the benefits of life cover

That’s why choosing AIA Australia’s Total and Permanent Disablement (TPD) policy is a smart choice for preparing for the unpredictable. TPD insurance offers financial assistance for those who need help in meeting the costs of their rehabilitation as well as to pay their ongoing living expenses. Depending upon your occupation type, you could receive a lump sum payout of up to $5 million.

What does TPD cover?

AIA Australia defines a total and permanent disability as:

  • The loss of eyesight in both eyes;
  • Loss of everyday use of one limb or;
  • Loss of eyesight in one eye and loss of use of one limb

AIA Australia will pay you a lump sum to help meet rehabilitation costs, medical bills, rent or mortgage payments, as well as your everyday lifestyle needs.

What types of cover can I choose from?

AIA Australia lets you either purchase your TPD cover as a stand-alone product, or you can include it as an extra-cost benefit within your Life Cover Plan. You can pay either a stepped, level or optimum premium.

AIA Australia offers three different types of TPD benefits. For a more comprehensive cover, you can choose Total and Permanent Disability benefit. If you only want to cover yourself for accidents, you can choose Accidental Total and Permanent Disablement. If you only want to cover yourself for complete loss of independence, you can choose Universal TPD cover.

As with most insurers, there are four different definitions of a total and permanent disablement. These affect your likelihood of receiving a claim. These are:

  • Any Occupation

You could receive a lump sum if you’re unlikely to work again in ‘any occupation’ following an illness or injury.

  • Own Occupation

AIA Australia will pay your benifit if you are unlikely to ever be able to work in the occupation you were last involved in before you made a claim. This definition is not available under the Accidental Total and Permanent Disability benefit and the Universal Total and Permanent Disability benefit.

  • Home Duties

If you’re a stay-at-home parent and suffer from loss of eyesight in both eyes, loss of one limb, or loss of eyesight in one eye or one limb, AIA Australia can pay you a benefit amount to help cover the costs of hiring extra help to complete your usual domestic duties.

The main difference to pay attention to is the likeliness of receiving a payout under “any occupation” or “own occupation”. For example, if a neurosurgeon loses an arm or a hand in a car accident, she may receive a payout under an “own occupation” definition as she’s unlikely ever to work again as a surgeon. However, she might not receive a payout under an “any occupation” definition as she can still work as a university lecturer or general practitioner based on her education, training and experience. If she were completely paralysed and suffered from complete loss of mental cognition, then she would receive a payout under an “any occupation” definition, as she would not possess the physical or mental capacity to work.

What’s included?

Along with the Total and Permanent Disability benefit (or the Accidental Total and Permanent Disability benefit), AIA Australia helps make sure you’re completely taken care of with a range of other benefits. Depending on the type of cover you choose, you could also receive:

  • Partial and permanent disablement benefit

AIA Australia will pay you a portion of your total sum insured if you suffer from the permanent loss of one arm, one leg, or sight in one eye. You can claim this benefit if a sickness or other injury results in your disability.

  • Premium Freeze

You can keep paying the same premium every year if you’re paying your premiums on a stepped basis and are aged over 35 (this does reduce your benefit amount).

  • Benefit Indexation

Because you need your benefit to be as valuable to you as the day you first took it out, AIA Australia will increase your benefit amount to stay in line with inflation.

  • Financial Planning Reimbursement

Because an illness or death in the family sometimes requires professional financial advice, AIA Australia can reimburse you or your family up to $3000 to cover the costs of getting a financial plan from an advisor.

  • Conversion to loss of independence cover

Because your benefit expires when you turn 70, AIA Australia can convert your cover to protect you for loss of independence only. This allows you to keep your insurance until you’re 100.

  • Conversion to accidental loss of independence cover

If you’re covered under the Accidental TPD definition, AIA Australia can convert your cover to protect you for loss of independence only when your cover expires at age 70. This means you can keep your insurance until you’re 100.

Want to compare this policy with others? You can compare AIA Australia’s insurance premiums with other policy providers through our free quote service.

Page last updated: April 4, 2014