Total Permanent Disability 2023

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Total Permanent Disability 2023Total Permanent Disability 2023

When you arrange critical illness cover in the UK, it will often be offered with Total Permanent Disability as a claimable condition. It’s also know as TPD and can either be included automatically or you can pay to add it on.

Critical illness policies usually offer around 60 conditions that you can claim on if you are diagnosed with them. Cancer, heart attack and stroke are the main conditions that people make critical illness claims on. TPD is one of these conditions.

What is Total Permanent Disability?

TPD is designed a kind of catch all for diagnosis of a condition that isn’t specifically covered by the critical illness contract, but is massively affecting your life. This can be both your ability to carry on working or your ability to do day to day things, depending upon how the insurer offers it to you.

TPD is usually offered on an Own Occupation, Suited Occupation or Working Tasks Definition. There also used to be Any Occupation too, but this and Suited Occupation aren’t usually used anymore. But they can still be used on older policies.

How Does it Work?

Let’s take a look at Own Occupation. I am an Insurance Adviser. If I was given TPD on an Own Occupation definition that would mean that the critical illness policy could pay out if I could never work as an Insurance Adviser again. Most people are offered TPD on an Own Occupation definition.

Now, Suited Occupation. If my critical illness policy was offered with TPD on a Suited Occupation definition, I would be assessed on my ability to do a job similar to mine. I work at a computer, I speak to people over the phone, videos calls and in person. It would be much harder to claim on TPD. I could be asked to be a receptionist, to be a graphic designer, or any number of desk based roles. I would need to be much more ill to be able to claim on this definition of TPD.

We then have Any Occupation. This would mean that if I claimed on the TPD part of my critical illness policy that I could be asked if I could become an astronaut, butcher, yoga instructor, photographer, literally any other job in the world. I would need to be seriously ill for the insurer to agree that there was not potentially that I could ever work again, in any kind of job.

The last main one that is used is Working Tasks Definition. This is where the insurer will assess your Total Permanent Disability claim upon your ability to do certain tasks. This can include things like the ability to prepare and cook a meal, being able to dress yourself and the distance that you can walk.

It’s also possible that you won’t be offered Total Permanent Disability with your critical illness cover, depending upon your circumstances.

Watch Out for Exclusions

It is very common to get exclusions on the Total Permanent Disability part of your critical illness cover. This is usually due to your health or work. Here are some examples.

  • Anxiety
  • Back pain
  • Depression
  • Diving at work
  • Chronic fatigue
  • Working at heights

An exclusion is never pleasant. But, it is really important to know that the exclusion just applies to the Total Permanent Disability claimable condition. You are still covered for everything else, with an exception in the list above.

To make things even easier for us all, insurers usually offer about four different options when it comes to critical illness cover. To make this simpler let’s say that there is just two: basic and fancy. With basic critical illness cover a mental health exclusion can often be put on the TPD part of your critical illness policy, if you have had anxiety, depression or some other things before.  With fancy critical illness cover (where you are insured against more conditions) there is another claimable condition that might be excluded: psychosis.

This is really tricky as an adviser. Usually we want to offer you the fancy critical illness cover as it is a stronger policy. But if you go for basic cover you could get a mental health exclusion on TPD, but you won’t have a psychosis exclusion as it’s not offered on the basic cover. If you go for the fancy option you could have a psychosis exclusion on the policy and a mental health exclusion on the TPD, which sounds more negative. You are still being covered for much more on the fancy cover though.

The Limits of Standalone Critical Illness Cover

And to make it an even better year for her, Krystle also won Intermediary of the Year 2023 at the Cover Excellence Awards too.

I speak to a lot of people who already have life insurance and say that they only want critical illness cover, they don’t need more life insurance. That can be true, but make sure you know about the potential limit of standalone critical illness cover: the survivability clause.

I’m going to use a really basic example here. Let’s say you take out standalone critical illness cover and you have a heart attack on Monday. But you die on Friday. With standalone critical illness cover a claim will not pay you!

This is because critical illness cover on it’s own comes with a survivability clause that means if you diagnosed with a critical illness but die within 14-28 days (depending on the insurer), they don’t have to pay a claim.

By including life insurance the claim would automatically switch from critical illness to a death claim. You might still want critical illness cover on it’s own but it’s so important to know about this rule. Plus, insurers sometimes charge you the same to have both life insurance and critical illness cover, as they do critical illness on it’s own. If it’s the same price you may as well have it!

Listen for more

Whilst this isn’t specifically a Cura award, it is an award that I won and it kind of sits

I recently recorded a podcast with consultant underwriter Matt Rann where we talk about TPD and how it works. You might find it useful to listen to.

With TPD it can be automatically included or it can be a paid for extra with your critical illness cover. Most life insurance and critical illness policies have an incredibly high claim success rate, with most insurers showing that they pay out more that 97% of these claims. But TPD sits outside of these statistics and the claim success rate is much lower. If you have the choice to add TPD on to your policy or not, it can be really useful to speak with an adviser who can help you decide if the extra cost is right for you.

Our award winning advisers will help you chose the right critical illness policy to match you and your needs.

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