National Protection Sales Manager Bernie Buron explains exactly what Total Permanent Disability is, as well as highlighting the importance of understanding when or why claims might not be successful

Claim success for critical illness, terminal illness, income protection and life policies, all boast an average pay out above 90%. Yet according to the Association of British Insurers (ABI), claims for Total Permanent Disability (TPD) in 2015 only averaged 66%. So why, despite the hard work advisers and providers are doing to create clarity and transparency on all types of policy, does TPD fall behind on claim success?

Although most definitions have been universally agreed, which has reduced the number of declined claims, there is still difficulty in proving whether a disability, as the name suggests, is “totally permanent”. This has unfortunately led to claims being made that did not quality for payment. This has cast TPD in a slightly negative light, despite how useful it can be for those looking for the most comprehensive cover.

What exactly is Total Permanent Disability?

TPD is normally an optional benefit which can be added to critical illness cover, if it is not already automatically included as part of the policy. TPD provides a lump sum if your client suffers an illness or injury that leaves them totally and permanently disabled.

Because the definitions of what is a total and permanent disability vary between providers, it is important to understand what situations are covered and which are not.

When would your client be covered?

TPD can often provide cover where critical illness can’t. Normally, providers require one of a certain number of definitions to be met in order for a TPD claim to be successful. This can either be based on the policyholder’s ability to continue their “own” or “any” occupation, or on the inability to perform certain basic tasks, such as bathing, dressing, eating and moving around.

TPD can also cover your client for loss of limbs or sight, as well as if they suffer cognitive impairment. But again, this can vary between insurers so it is vital to check cover options.

What is the difference between “own” and “any” occupation?

Own occupation means your client’s cover is only for their current role. This can often mean a more expensive premium, compared to “any” occupation. An example of this would be a surgeon with “own” occupation cover being able to claim if they lost the use of their hands. However, “any” occupation cover would likely mean they would still have options in the medical industry that do not necessitate the use of hands, such as becoming a general practitioner.

There are some situations where an illness or injury prevents your client from working, but is not necessarily permanent. An example of this might be a temporarily debilitating migraine which prevents them from working, but is very unlikely to be deemed a total permanent disability.

Income Protection as part of your client’s comprehensive cover will greatly improve their chances of always being covered, even if their inability to work is temporary. The most comprehensive cover can deliver peace of mind and protect your client under the most circumstances.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.