Income Protection

Total and Permanent Disability (TPD) or Income Protection Insurance is usually an optional extra under your life insurance policy.  As the name suggests, income protection insurance allows personal income or business expenses to be paid if illness or injury prevents you from working.  It is usually paid at a rate of up to 75% of your regular income and is paid fortnightly or monthly rather than as a lump sum.

One of the main terms you need to understand with a TPD insurance policy is whether the policy insures you for your “own” occupation or “any” occupation.  For instance, if you are a dentist and damaged your eye, you may not be covered under "any" occupation because you could still perform other jobs.

You need to also consider the waiting periods, which can be up to two years.  The other consideration is how long the benefit would be paid for.  This can be from a few years or until you reach 65.  The differences between policies will obviously affect the premium paid, however it is important to ensure you have adequate insurance cover in place.