When an illness or injury leaves you unable to work, the financial fallout can be devastating. That's where TPD (Total and Permanent Disability) insurance and income protection insurance come into play. But, while both serve as financial safety nets, they work in quite different ways, including the requirements to make a claim.
 

TPD Insurance: Provides A Lump Sum Payout for Permanent Disability

TPD insurance provides a one-time, lump sum payment if you become totally and permanently disabled and can no longer work. To qualify for a claim, you generally need to prove that your disability is severe and unlikely to improve, preventing you from ever returning to work. This money is intended to assist with:

• Covering substantial medical expenses

• Making major lifestyle adjustments (e.g., modifying your home)

• Paying off debts like your mortgage

Income Protection Insurance: Provides Monthly Income

Income protection insurance is designed to replace a portion of your income (usually up to 70%) on a regular basis (often monthly) if you cannot work due to a temporary or permanent disability. The requirements for a claim are less stringent than TPD; you'll typically need to show you're unable to work for a certain period due to your illness or injury. This helps you:

• Maintain your standard of living

• Pay ongoing bills and expenses