Insurance within super
Total and Permanent Disablement (TPD) Insurance
Section: 10.4
10.4 Total and Permanent Disablement (TPD) Insurance
Total and permanent and disablement (TPD) cover is a lump-sum benefit payable on the total and permanent disablement of an insured person, which can be funded through superannuation.
A total and permanent disablement means the insured is never able to work again in either:
- an occupation reasonably suited by training, occupation or experience, or
- their own occupation, for instance the occupation in which they where employed prior to disablement.
TPD Definitions
TPD any occupation - insurance against the member suffering an illness or injury that is likely to result in the member's permanent inability to work in a job for which the member is reasonably qualified by education, training or experience.
TPD own occupation - insurance against the member suffering an illness or injury that is likely to result in the member's permanent inability to work in the member's own occupation.
| 'Own occupation' TPD permanent incapacity definition
From 2014 superannuation fund trustees were not able to take out 'own occupation' TPD insurance. This is because of a potential mismatch between the insurance policy definitions and the definition of permanent incapacity under superannuation law. Previously when an own occupation TPD policy held in superannuation was paid out, the proceeds could not be paid to the member until they met a condition of release. |
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Last modified: Friday, June 23, 2023