It is hard to think about the worst case scenario, but imagine how your houshold would survive if the main provider was to suffer an injury or illness which prevented them from working ever again. Total & Permanent Disability insurance covers situations as such. The cover is designed to assist you where you become totally and permanently disabled due to a number of events that range from neurological disorders like Motor Neurone Disease to onset of heart disease, spinal cord injuries or even cancer. Some insurers may also cover certain mental illnesses that render you totally and permanently disabled.

When claiming for a TPD cover, you don't have to prove that someone else is at fault. It is also not necessary to show that the injury or illness was caused by negligence of an employer, someone else or even yourself.

The payout for your TPD claim is a one-off payment which, depending on the insurer, can be upto $2 million. These funds can cover medical expenses, help make the required modifications to your lifestyle r even make up for the loss of income.

According to your lifestyle and occupation, you can choose to take out a cover from a range of options, these may vary from one insurer to another. Your premiums can be either Level or Stepped. Level premiums remain constant over a period of time, whereas stepped premiums inrease each year as you age. Insurers also provide you with the option of increasing your cover in accordance with the cost of living - with this option, your premiums also increase through a process called indexation. If you experience a major life event like getting a mortgage or becoming a parent, you can always increase your cover amount. For full information on what each insurer offers, read the relevant insurer's Product Disclosure Statement.

TPD cover can be taken out as a standalone policy (on its own) or linked to your Life Insurance policy. Premiums are calculated based on factors like your gender, age, health, pastimes, occupation, whether you smoke and the level of cover you are applying for.