If you’re planning your finances, you must future-proof, which means discussing Total Permanent Disability Insurance options with your financial planner. Ultimately, your life can change in an instant and protecting your assets won’t mean much if you find yourself permanently injured or dealing with a long-term illness. We discuss how TPD insurance can form part of your legal strategy for protecting your assets.
Understanding TPD Insurance
Before you can understand how TPD insurance can protect your assets, you need to understand what TPD insurance is.
What is TPD Insurance?
Total Permanent Disability (TPD) Insurance is a form of insurance designed to protect your finances against a total and permanent disability, injury, or illness. In the event the worst-case scenario befalls you, this insurance will pay a lump sum based on your disability, injury, or illness.
Key Considerations
The first consideration is your policy – how it defines a total and permanent disability. Some are stricter than others about what that means. For example, if you have TPD Insurance in super, it’s likely more difficult to make a claim than with a private policy.
There are waiting periods – so while you have a limit to when you can make a claim against your insurance, there is also a gap between the claim and the payout which you need to consider. How will you get through that period without the lump sum it provides?
Generally, TPD claims are paid out in one lump sum. Is that sufficient coverage for you? Or, do you need a policy that provides regular payments instead? Consider your financial needs and how your policy covers you.
Some policies will only pay out if you’re unable to work in your specific occupation rather than in any occupation. If you choose that type of policy, you need to ensure you choose the correct occupation to cover yourself.
It’s important that you’re familiar with the ins and outs of your policy because there are always exclusions and it’s best to limit those as best you can. You can’t predict the future, but you want a policy as broad as possible to cover every potential outcome.
Legal Strategies for Protecting Assets
It’s important that you future-proof your financial health and that means using legal strategies to protect your assets.
Estate Planning
Estate planning is a must. You should have a comprehensive plan that protects your assets and leaves instructions on how to distribute them properly after your death. It’s best discussed with a financial planner or accountant, but they can recommend trusts to limit tax liabilities and manage your assets.
Asset Protection
You can also shield your assets from potential creditors through legal claims and bankruptcy. You should speak to a legal professional about family trusts or an asset protection trust.
Disability Discrimination Act
If you have Permanent Disability Work Cover, you should familiarise yourself with the Disability Discrimination Act 1992. This will ensure you know how to protect yourself from employment discrimination and highlight the best way to navigate the services you are entitled to draw from.
Financial Planning for TPD
Whether you have Total Permanent Disability in super or a private policy, understanding how Total Permanent Disability (TPD) claims can help you with your finances is key.
Budgeting and Cash Flow
You don’t need to wait for the worst-case scenario to unfold, you can start planning now by developing a realistic budget for your current expenses. That will give you time to contribute to a savings fund for your future if the worst should happen. Again, speak to your accountant or financial planner about shielding these assets. That way, you know you can cover the basics and maximise the TPD lump sum coming your way in the event of total or permanent disability.
Government Benefits
If you experience a total and permanent disability, there are government support programs available, and you may be able to claim benefits as well. It can be complicated to navigate the system because it’s hard to know what you’re eligible for and the system doesn’t make it easy. That’s where working with an experienced lawyer can help ensure you maximise your benefits.
Investment Strategies
There’s nothing to stop you from taking a low-risk investment approach to creating income if you want to maintain your financial situation. That’s an option before and after total and permanent disability, but it’s best to future-proof your finances when everyone is well.
A financial planner can offer advice on how best to approach low-risk investments and broaden your investment portfolio to maximise your income.
Debt Management
Everyone carries debt, but the only way to manage it properly is by having a strategy in place to pay it off – that strategy should consider a change in your financial circumstances as well to avoid financial stress.
Paying as much of it down as possible when you’re well will help protect you in the event of a total and permanent disability.
Seeking Legal Advice
Whether you have experienced a total and permanent disability or you’re future-proofing your financial situation, speaking to a qualified legal professional is a must.
A lawyer can review your insurance policy documents to assess your coverage and ensure you have adequate protection.
In the event of total and permanent disability, your lawyer will help you gather the documents and evidence you need to file a claim and ensure it’s compelling enough to guarantee a payout. If the insurer wants to delay or avoid a payout, having an experienced lawyer to advocate for you is key to getting the benefits and compensation you deserve. If the insurer does reject a claim, your lawyer can help you appeal or pursue legal action to get you what’s rightfully yours.
A lawyer can also provide advice about asset protection, estate planning, and financial strategies in the event of a total and permanent disability or before you have health concerns.
How AJB Stevens Can Help
With a solid history of filing TPD Claims and fighting insurers, AJB Stevens will ensure you get the payout you deserve. Get in touch with us today to discuss a claim, whether it’s ongoing or you’ve yet to file. In addition, we can review your current policies and offer advice on whether it’s the right fit for you.
