Q&A
In reviewing his insurance cover in super, Mark needs to be aware that ...
TPD can be a nightmare
Q Hi Paul. I have just done a review of our super and changed providers. But I am wondering how to evaluate what insurance amounts (TPD, income protection, death cover) we need. Do you have any guidelines to work from?
Yep, let’s run an unbiased eye over this important issue. Pretty obviously the key is not to have too little or too much.
Let’s do the hard bit first, Mark. TPD, or total and permanent disability, is complex. It should not be, but we get down to the definition of exactly what this is defined as. TPD fine print can be a nightmare. Some policies I have seen come with a shipping container amount of detail, most of it trying not to pay you. I appreciate that an insurance company makes money by collecting premiums and not paying out too much, but that is of little interest to you. So, you need to know under what condition you will be paid. Here a really good broker can help.
The worst of all scenarios is that you are severely disabled, and in need of constant medical help, changes to your home, home assistance and so on. I am not sure you can ever have too much cover for this. But the actual cost is really hard to calculate. It all depends on the nature of your disability. It is as much hope as science. The critical
