Total and Permanent Disability Insurance (TPD): Your Safety Net When Life Takes an Unexpected Turn

Total and permanent disability insurance can be a tremendous help if an unfortunate event happens.

Life is unpredictable. One day you are healthy and working, and the next, you could face an accident and caused a total and permanent disability (TPD).

While no one wishes for it to happen, a car accident, stroke, or severe illness are just a few examples that may cause a TPD, rendering you unable to work and earn an income. This can have a devastating impact on your financial future, and even worse, if you have dependents.

One way of alleviating these financial difficulties is with total and permanent disability insurance. During the course of this article, we will explain TPD insurance— what it is, how it works and the many benefits it offers. 

What is total and permanent disability?

Total and Permanent Disability, often referred to as TPD, is a term that encapsulates a range of conditions or injuries that render an individual permanently unable to earn an income.

TPD can encompass various situations, such as the loss of limbs, significant cognitive impairment, or chronic illnesses. In TPD cases, one is typically unable to perform daily activities without assistance.

What are examples of total and permanent disability?

Examples of total and permanent disability include severe spinal cord injuries resulting in paralysis and advanced stages of certain diseases like Parkinson's or multiple sclerosis. The loss of limbs or even loss of both eyesight and hearing can also be considered as TPDs

In essence, any condition that irrevocably impacts one’s ability to lead an everyday life and engage in gainful employment can be classified as a total and permanent disability.

What is the difference between partial and total permanent disability (PPD vs. TPD)?

It's important to differentiate between partial and total permanent disability. Partial permanent disability refers to a condition where an individual can still engage in some form of work—even if it's not their previous occupation.

Total permanent disability, on the other hand, implies a complete inability to perform any work due to the severity of the condition. TPD insurance is specifically designed to address this loss of income potential.

What is total and permanent disability insurance?

Total and permanent disability (TDP) insurance is a type of insurance that provides a lump sum payment if one becomes totally and permanently disabled. This lump sum payment may help cover living expenses, medical bills, utility bills, and other financial obligations.

How does total and permanent disability insurance work?

When you opt for TPD insurance, you pay regular premiums to the insurance provider. In return, the insurance policy promises a lump-sum payment if you're ever diagnosed with a qualifying total and permanent disability in the future.

This payment can be used to manage medical costs, including hospitalisation, medicine and doctor’s visits, repay debts, and provide for your dependents if you have any. You can also utilise the money to adjust your living situation to accommodate your needs. For instance, using the funds to build a wheelchair ramp if you cannot walk.

What does total and permanent disability insurance cover?

TPD insurance coverage varies among providers and policies but generally covers a broad spectrum of disabilities. This can include physical disabilities, cognitive impairments, loss of senses, and chronic illnesses. It's imperative to thoroughly review the terms and conditions of your chosen policy to ensure it aligns with your needs and expectations.

Benefits of total and permanent disability insurance

There are many benefits to having TPD insurance. Some of the considerable benefits include:

• Peace of mind: Knowing that you have financial protection if you become totally and permanently disabled can give you peace of mind.

• Financial security: A TPD insurance payout can help cover your core living expenses, medical bills, and other financial obligations. This can help you maintain your previous standard of living and avoid financial hardship.

• Medical expenses: A total and permanent disability often comes with significant medical expenses. You may need rehabilitation, therapy, medication and even specialised equipment. Insurance benefits can help cover these costs and ensure access to the much-needed care.

• Protection for your loved ones: A TPD insurance payout can also help provide some supplementary support for your loved ones if you become totally and permanently disabled.

• Debt management: The insurance payout can be used to settle outstanding debts such as mortgages, car loans, and credit card debt

• Maintaining your lifestyle: Disability can result in lifestyle adjustments that require financial resources. Insurance benefits can help one maintain their standard of living and cover daily expenses.

• Caregiver support: In some cases, a total and permanent disability might require hiring caregivers for daily activities. Insurance can cover the costs of caregiving services.

• Education: If you have dependents, the insurance benefit can be used to fund their education.

 

 

How to choose a total and permanent disability insurance policy?

Selecting the right TPD insurance policy requires careful consideration. You’ll want a policy that covers your needs while suiting your budget. Here are some steps to guide you:

1. Assess your needs: Determine the coverage amount required to manage potential medical expenses, daily living costs, and any outstanding debts.

2. Policy features: Iteratively compare policies from reputable insurers to understand their coverage, terms, and conditions. Ensure to look for features that align with your specific situation carefully.

3. Understand the definitions: Different providers may have different definitions of 'total and permanent disability.' Some require you to be unable to work, while others have a broader scope. Ensure you know the criteria that need to be met for the policy to pay out.

4. Premiums: Evaluate the premium costs against the coverage offered. Ensure that the premiums are sustainable for the long term. Additionally, remember that cheaper premiums might not always provide adequate coverage, so you’ll want to balance the cost with the benefits offered.

5. Policy duration: Choose a policy duration that suits your financial goals and needs. Remember, some policies offer coverage until a certain age or for a fixed number of years.

6. Understand exclusions: Be aware of any exclusions that the policy might have. Familiarise yourself with the circumstances under which the policy will not provide coverage.

7. Check the claims process: Understand how to make claims, including the documents required, timelines and other steps you need to take. It’s best to choose providers with a transparent and straightforward claims process.

8. Ask questions: Don't be shy to ask questions if you need help understanding any aspects of the policy. Clear communication with the insurance provider ensures you're making an informed decision.

How to claim TPD insurance?

When the unfortunate event of total and permanent disability occurs, the process of claiming TPD insurance involves notifying your insurance provider and submitting the necessary documentation. This will include doctor’s reports, receipts, etc.

Each insurance company may have specific procedures in place. However, this detailed guide on how to claim Prudential’s TPD insurance should provide all the essential information you need.

Total and permanent disability insurance Malaysia

In Malaysia, Prudential’s PRUWith You Plus is a comprehensive insurance that includes total and permanent disability coverage, among other benefits.

This solution is designed to provide a safety net for your financial future, protecting you and your loved ones against unexpected circumstances.

It is important to note that this is not a standalone TPD insurance policy but a holistic solution that offers various protections. For instance, you can add on medical insurance such as PRUValue Med and critical illness coverage with riders such as Total Multi Crisis Care. Besides this, you can also opt to add the Payor Basic rider, which works to pay your premiums upon TPD, death or a diagnosis of a critical illness.

Conclusion

All things considered, total and permanent disability insurance is a significant financial protection that can help you if you become totally and permanently disabled. If you are considering purchasing TPD insurance, carefully compare the policies offered and choose one that meets your needs. Contact our team at Prudential Malaysia for more and the latest information on total and permanent disability insurance.