Fali Mistry –
Does Total and Permanent Disablement Benefit pay out?
This is a very grey benefit, which many advisers do not offer.
While this benefit is valuable to the client, it does not cost much.
It is called the TPD Benefit and this is a lump sum pay out in an event of a policy holder becoming totally and permanently disabled and will never be able to go back to work in his or her profession.
This benefit can be availed of in two ways, i.e. ‘Own Occupation,’ which is generally offered to people in softer and less risky professions such as desk-based duties.
However, some insurance providers have extended this benefit to occupations such as chef, nurses, taxi drivers and builders, who are at high risk of getting totally and permanently disabled.
‘Any Occupation’ is generally offered to housewives, students and children, who fall under Class 5, but some providers offer this to people working as Class 3 or Class 4 occupation.
Hence, I strongly recommend that people who are working in risky environments like taxi drivers, courier operators, builders and trades to review their policy and get the correct provider who offers them the ‘Own Occupation’ definition.
The definition is important since there could be a potential decline in claim if they are under ‘Any Occupation’ definition under their existing policy.
I have settled two Total and Permanent Disablement claims for my clients, one each in ‘Own Occupation’ and ‘Any Occupation.’
Both of them were obviously very happy.
Fali Mistry is a Registered Financial Adviser at Mazda Financial Services Limited based in Auckland. He is a Member of the Institute of Financial Advisers. Phone: 0508-467872; (09) 6255060; Mobile: 021-426858; Email: fali@insuresecure.co.nz; Website: www.insuresecure.co.nz
