Total Disablement Booster Payment

The Total Disablement Booster Payment allows your monthly benefit to increase beyond 75% of your salary if you suffer from a total and permanent disability.

It is generally an additional option, however a number of insurers have started offering it as a built in benefit.

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How does the booster payment work?

Normal income protection policies cover up to 75 per cent of your salary if you suffer a sickness or injury and are unable to work. The booster payment option allows for this monthly benefit to be increased to almost 100 per cent of your monthly salary if you suffer a total and permanent disability.

In order to be eligible for this benefit, insurers will generally require you to:

Be unable to perform at least two of the Activities of Daily Living for a period of at least 6 months.

The Activities of Daily Living (ADL) are generally:

  • Bathing
  • Dressing
  • Eating
  • Using the toilet for maintaining hygiene
  • Moving in and out of bed or a chair or wheelchair, or moving from place to place by walking, wheelchair, or with assistance of a walking aid.

Insurers may require you to be assessed by a medical practitioner and for you to be re-assessed on an ongoing basis.

Please note that select insurers may place a limit on the amount of time you can receive the booster payment for, with some only paying it for the first 3 months while others may limit it to 24 months.

When should I consider the Total Disablement Booster Payment?

If you are unable to afford a full TPD policy, including this option may be a good alternative. However it is important to note it is not an absolute replacement for TPD cover.

Case Study

Lily decides to take out an income protection policy with a monthly benefit of $1,500. As part of her policy she decides to the Total Disablement Booster Payment in the event that she became totally and permanently disabled, allowing her to receive an additional monthly benefit of $495, on top of her regular $1,500 monthly benefit.

Unfortunately Lily is involved in a car crash and suffers a spinal cord injury, resulting in her left leg being paralysed. Due to her injury she is unable to perform several of the Activities of Daily Living without assistance and starts to receive her monthly benefit of $1,500 after her waiting period has ended.

Six months after suffering her injury, Lily is still totally and permanently disabled and unable to perform 3 of the activities of daily living. As a result, her total disablement booster payment commences, allowing her to receive an additional $495 per month, increasing her monthly benefit to $1995.

Published: August 20, 2015
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