Insurance Planning

Total and permanent disability insurance

Definitions of disability

To be considered totally and permanently disabled under an “any occupation” definition you need to satisfy the insurer that you are unable to work in any occupation for which you are reasonably suited by way of education, training or experience. If you meet this definition your claim will be paid.

For example, if a heart surgeon injures her wrist so as to prevent her from being able to operate she may not be able to claim on her insurance as there may be other work she is able to undertake, such as teaching heart surgery.

If you insure for your “own occupation”, and become disabled and are unable to perform your own occupation (sometimes the main functions of your job), you’ll receive a payment.

For example, if a heart surgeon is no longer able to operate, they’re more likely to make a successful claim under an “own occupation” policy.

The ‘own occupation’ is generally a more expensive option; however, this may be more beneficial to people who have a specialised job or business. You can no longer purchase new “own occupation” insurance policies inside superannuation so this type of policy must be held outside superannuation. “Any occupation” definitions of total and permanent disability insurance cover are still able to be acquired through a member’s superannuation fund. The reason for this is that from 1 July 2014 only the “any occupation” definition meets a condition of release under the superannuation rules; however, grandfathering provisions apply for “own occupation” insurance policies that were established prior to this date.