An insurance policy covering total and permanent disability (TPD) should normally be part of a suite of insurances we know as "life risk". They include income protection, trauma, life and, sometimes, business expense cover. All have different purposes and cover you for different events.
TPD offers a lump sum payment if you are deemed to have become totally and permanently disabled. The criteria are spelled out in the policy.
As with all forms of insurance, it is important that the structure of a TPD policy is considered carefully.
There are essentially two types of TPD insurance. One is called "own occupation" and the other is "any occupation". The differences are important.
For example, a car mechanic may have a hand crushed which would make it impossible for him to continue in his occupation. But he may be able to work at another occupation for which he has skills and experience. In this case, the "own occupation" policy would apply, but an "any occupation" payout would not be available.
We recently achieved claims for a medical specialist over both. The specialist had taken out an "own occupation" policy with one broker and an "any occupation" policy with another. We were not involved at the time but helped our client as part of an overall claim at a number of levels.
The specialist's occupation required him, at times, to be on call 24 hours a day for stretches up to six days at a time.
He was later diagnosed with cancer and the treatments resulted in him suffering chronic fatigue. Clearly, he was no longer capable of meeting the on-call demands of his profession and recently sold his practice.
There was no issue in achieving a claim for the "own occupation" policy. However, the "any occupation" policy required a substantially different approach. We were able to achieve payment on both policies.
The "any occupation" policy will be paid out if the policy-holder is unable to work in any other occupation for which he or she is qualified and experienced.
While it may seem at first glance that the medical specialist could have taken up lecturing in his chosen specialty, he had spent his career totally focussed on delivering his services to his patients and had never been trained to do anything else.
He is neither trained nor is he experienced in any field other than working in his specialty. Therefore he qualified for a payout under the "any occupation' policy.
When framing a policy, it is vital that an individual and his or her life risk advisor carefully consider the benefits and downsides of both options before selecting a policy that will best suit their needs into the future.
FURTHER INFORMATION
Mark Everingham
Personal Risk Professionals
Phone: 07 30475555
Email: mark@personalriskprofessionals.com
