TPD insurance in Australia, and what it actually pays.
TPD insurance in Australia pays you a lump sum if you can never work again. Whether it pays at all comes down to two things most people never check: which job the policy measures you against, and whose name it is held in.
The wording is the whole thing.
TPD varies more between insurers than any other cover. The same accident can be a straightforward claim on one policy and a fight on another. Which wording you hold is the whole game — and it's the main reason specialist doctors need cover written against the job they actually trained for.
- +Own job versus any job
One pays when you can't do your job. The other only pays when you can't do any job you're qualified for. They are different products wearing the same name.
- +What you do matters
A neurosurgeon who can no longer operate could probably still teach. The 'own job' policy pays. The 'any job' one might not.
- +The wording keeps changing
Insurers rewrite these policies every few years. We compare what is on offer now, not the version you bought five years ago.
- +On its own, or attached
Attaching it to life cover is cheaper up front. Keeping it separate means the full amount survives if a life claim gets paid later.
Six versions of the same thing.
There are three ways the policy can judge you, and three ways it can be owned. The six combinations cost very different amounts and behave very differently at claim.
Own occupation
Pays out if you can't go back to your own job. The right choice for anyone whose training only fits one line of work.
Any job you're suited to
Only pays if you can't do any work you're qualified for. Cheaper, much harder to claim on, and what you get by default inside super.
Everyday tasks
A third, weaker version used for people not in paid work, or where an insurer won't offer the better ones. Only pays if you lose a lot of basic function.
On its own
A policy with its own amount attached. The full sum stays intact even if a life insurance claim is paid later.
Bolted onto life cover
Cheaper at the start. But if TPD pays out, it comes off what your family would have got from the life cover.
Inside super
Premiums come out of your balance. Usually only the weaker 'any job' version, and there are extra hoops before the money is actually released to you.
What the money has to cover.
We work the amount out from what actually costs money when you can never work again, not from some multiple of your salary. Income protection carries you while you're recovering; TPD is for when you aren't going back. Both sit inside the financial plan.
Clearing the debt
The mortgage and any personal loans paid off, so nobody is meeting repayments on one income or none.
Medical bills
Specialist gaps, physio and the rest, equipment, and being able to go private when it matters.
Changing the house and car
Ramps, lifts, a bathroom you can use, a modified car. In serious cases this runs well into six figures.
Income until you would have retired
Income protection stops at 65 at the latest. TPD has to cover the rest.
Help at home
Paying for care, covering a partner who drops hours, and looking after the kids.
Something to invest
A buffer that can be put to work generating an income alongside everything else.
Who you're dealing with.
- Your adviser
- Balki Balakrishnan
- Experience
- 12+ years writing personal cover
- Member of
- FAAA
- Authorised as
- AR 409415 of La Verne Capital Pty Ltd
- What we focus on
- The wording, the ownership, and whether it pays
- On its own?
- Yes — we will review cover without a full plan
TPD is one of the four covers we arrange most often, alongside income protection, trauma and life. Recommending it means giving you personal advice, so it sits under our financial planning licence.
Questions people ask before booking.
Being judged against your own job is the stronger deal, and it matters most if your training only fits one thing. The “any job” version is cheaper and is what you get inside super. Which suits you depends on what you do, what else you could do, and what you can afford.
Inside super is easier on the household budget, because it comes out of your balance. Outside super, you can get the stronger “own job” wording and there's one less hurdle between a claim and the money landing. Plenty of people split it between both.
We work it out from what you'd need to clear, what it costs to keep living the way you do, medical bills and changes to the house, and income right through to retirement. The slider on a website almost never lands on the right number.
Being permanently unable to work, judged against whatever the policy says. The usual causes are cancer, mental health conditions, back and joint injuries, neurological conditions and serious accidents.
Held in your own name outside super, the payout is generally tax-free. Inside super, it's released under super rules and some of it may be taxed depending on your age and how the money is made up. We go through it properly for your situation.
The other covers
- All personal risk coverHow TPD fits with the other four covers.
- Income protection insurancePays you monthly while you recover, rather than one lump sum.
- Trauma insuranceA lump sum when something serious is diagnosed.
- Life insuranceWhat your family gets if you die. Often bought with TPD.
- Business insuranceCover for partners, key people and buy/sell deals.
- Insurance for doctorsCover judged against your own job, and applying as a specialist.
Information on this page is general in nature. It does not take into account your personal objectives, financial situation, or needs. Read the relevant Product Disclosure Statement and consider whether personal advice is appropriate before acquiring any insurance product mentioned here.
Book a free TPD review.
An hour on the file. If the definition you hold matches the work you do we will say so. If it does not we will show you the alternative.