Own Occupation TPD

Own Occupation Total and Permanent Disability (TPD) Insurance pays a lump sum benefit in the event that you are totally and permanently disabled and unlikely to ever be able to return to your own or specific occupation.

Published March 7, 2017

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Advantages of Own Occupation

The main advantage of Own Occupation TPD is that it provides cover for your Specific Occupation, meaning you can still be paid a benefit if you are able to work in another occupation that is not your own.

What is my Own Occupation?

Own Occupation is defined as the most recent occupation the insured person was engaged in before the date of total and permanent disablement.

In the case where you have recently changed jobs, select life insurers will use the more favorable of:

Please note that this is a general definition only and exact definitions will differ between insurers. Please refer back to relevant PDS for a more exact definition of the policy

General Policy Details

Entry Ages: 16-64
Policy Conversion Age: 65-70 (Policy will generally convert to Modified TPD)
Policy Expiry Age: 65-100 (Depending on your insurer)
Max Sum Insured: $5,000,000

What can the benefit be used for?

The lump sum benefit is designed to help you and your family if you are never able to work again.

Some ways the benefit could be used include:

Definition

In order to claim:

What is the Partial payment benefit?

Select life insurers offer partial benefits of up to 25% of the sum insured in the event the insured person suffers the permanent loss or use of:

If later the insured person becomes totally and permanently disabled, generally the policy will pay out the balance of the sum insured.

Own Occupation vs. Any Occupation

Own Occupation TPD offers a higher level of cover than Any Occupation as it provides cover for your own, specific occupation.

Its main benefit is that if you are unable to continue working in your own or specific occupation but can continue in another occupation, you may still be able to receive a benefit.

For this reason it is generally more expensive than Any Occupation, which doesn’t provide cover if you are able to continue working in another occupation.

Any Occupation, is the most common form of total and permanent disablement cover in Australia. It is designed to cover you for Any Occupation that you are suited to by training, education or experience.

We make it easy for you to compare policies online with our powerful comparison engine.

Buy with confidence today for peace of mind tomorrow.

Superannuation

While TPD cover is generally available to be taken out through superannuation, Own Occupation is no longer available through super.

If you have already have Own Occupation TPD insurance through your super fund, your cover remains in place.

A number of other things need to be taken into account:

The Insurance Premiums are no longer fully tax deductible to your superannuation fund and may only be partially tax deductible.

Accessing lump sum payments prior to retirement age may be difficult. In order to access funds, the superannuation fund must meet the conditions of release under SIS Regulations which states that:

  1. ‘A trustee must be reasonably satisfied that the member (the person who is receiving the release of benefit) never intends to become gainfully employed in a full time or part time capacity.’ (APRA Prudential Practice Guide, Page 8)
  2. ‘The trustee must be satisfied that retirement has occurred which may include presenting evidence of the member’s age, cessation of employment or intention of member to never be employed in a part time or full time capacity.’ (APRA Prudential Practice Guide, Page 8)

Case study

Steve is a neurosurgeon and takes out Own Occupation policy to protect his family and himself in the event that he suffers an injury or sickness which renders him totally and permanently disabled, and unable to return to work as a surgeon.

Unfortunately Steve is involved in a car accident and is forced to have his arm amputated. As both arms are critical in Steve’s job as a surgeon, he is unable to return to his role and is able to claim a lump sum payment under the terms of his Policy.

As Steve trained as a doctor before becoming a surgeon, he is able to return to work as a consulting doctor but still receives his payout as it was not his own occupation. Had he taken out Any Occupation, he would not have received a payout.

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