When the worst happens and you’ve been injured in the workplace or suffer trauma or illness and cannot work, having the right insurance policies in place can be a godsend. But it’s good to know the difference between these insurance covers.
Trauma insurance, which is also known as recovery insurance or critical illness insurance, and Total and Permanent Disability (TPD) insurance are different for the following reasons:
Trauma Insurance
A successful trauma insurance claim will be paid as a lump sum if the person covered by this policy suffers a severe injury or critical illness. The benefit paid by trauma insurance can help an injured worker to recover and go back to work. However, trauma insurance does not cover mental health conditions.
Basically, if you have a trauma insurance policy, a successful claim will mean a payout if you suffer from a specified medical event included in your Product Disclosure Statement (PDS). Depending on your level of coverage, Trauma insurance applies to 45 medical definitions. Some of the main ones include:
- Heart Attack
- Coronary Bypass Surgery
- Cancer
- Stroke
- Accident (burns or major head traumas etc.)
The lump sum benefit you may receive from a Trauma insurance payout can pay your hospital and medical bills, make changes to your lifestyle, and take enough time off work to fully recover so you’re ready to go back to your job.
Total and Permanent Disability Insurance (TPD)
TPD insurance is different to trauma cover in that a successful claim offers a lump sum payout if you can’t work in any kind of job or in the occupation you are experienced, educated or trained to perform. This is regardless of what caused your disability.
It’s usual for TPD cover to pay only if you cannot work again, but this depends on your level of coverage. The benefit is a lump sum payment or a monthly instalment if your claim is successful. Unlike trauma cover, TPD pays out successful claims due to mental health injuries and illnesses and is designed to replace your income and support you and your dependents for a prolonged period. TPD also helps with any health care bills that might have built up due to your disability.
The Two Main Kinds of TPD Cover
Your TPD cover is likely to be part of your Superannuation fund and offers different levels of insurance that allow you to choose between standard and comprehensive cover. The two options are:
- “Any occupation”- this is a standard or basic cover and means that you are never able to work in any occupation again. You must be diagnosed and assessed by medical experts to be deemed unfit to work again before an insurer will consider paying out the benefit.
- “Own Occupation” – This is a comprehensive cover option and includes a broader range of features and benefits. This cover is job specific and means you would be unlikely to ever work in your specified occupation again. However, you may still work in another kind of job.
It’s good to be aware that both Trauma and TPD insurance may be paid out concurrently should you meet your insurer’s definitions. Contact the TPD Helpline so we can help you to determine whether or not you can claim on both of these policies.
What Are the Key Features of TPD Insurance?
If you’re injured or ill and cannot work, you can make a TPD claim. But in order to make a claim against your TPD insurance, whether through your Super fund or privately, you must be a paid employee in a gainful occupation to apply.
Depending on your insurer, what are the possible key features?
- The maximum benefit amount payable is up to $3 million.
- The “Any occupation” definition limits up to $3 million.
- When a major life event occurs, there are cover increases of up to $200,000 without underwriting.
- There is a financial planning benefit of up to $5,000.
What Are the Key Features of Trauma Insurance?
The different insurers offering trauma cover will have different definitions of what is considered a medical condition that is claimable. Before you sign up for trauma insurance or need to make a claim, read the (PDS) Product Disclosure Statement carefully or get legal advice.
Trauma insurance can help pay for:
- Living expenses for you and your family while you can’t work.
- Any out-of-pocket medical expenses.
- Modifications or changes to your home if necessary.
- Expenses incurred for therapy, special transport or nursing care.
- Paying debts, for instance, a mortgage.
Call the TPD Helpline Today
When you call the TPD Helpline, we listen with compassion and understanding when you need advice about a claim for your permanent disability, and we provide relevant and timely advice on trauma insurance policies and how you should proceed in finding the right legal help for a successful TPD claim. Contact us at the TPD Helpline today on 1300 679 222 or email tpdhelpline@gmail.com.
