Own occupation TPD is the preferred definition as the criteria to meet is based on you not being able to perform your own occupation. It provides you with the highest opportunity to make a successful insurance claim. This is reflected in the higher premiums that accompany this form of cover and is usually only available outside super. Own occupation TPD cover is only available to certain occupation categories and is usually recommended when a person has a specialist occupation, for example, a surgeon. It is highly recommended to have Own occupation TPD when available.
If you have an Own occupation policy, you will receive benefit payment if you are unable to work in your usual occupation or profession. This means you will be able to claim even if you can work in a different field.
The alternative is Any occupation TPD which can be owned under superannuation allowing premiums to be funded from concessional-taxed super contributions. Under the Any occupation TPD definition you would need to be rendered unable to do not just your own occupation but any occupation reasonably suited to you by education, training and experience. Legal precedents show that the insurer can look at a wide range of potential occupations when deciding whether an applicant is likely to ever work again, some of which may bear little resemblance to the applicant’s prior occupation.
Any occupation will only cover you if you are unable to return to the workforce in any job/role that is suited to your education, training or experience. This is a much broader definition that’s harder to prove, so you might have to return to work but in a different role.
For instance, if you were a surgeon, you might have to return to work as a GP if you were no longer able to perform your duties as a surgeon as a result of your injury or illness.
This begs the question, who should consider having an Own Occupation TPD definition? Come talk to one of our Advisers to give you a bit more clarity on whether it would be beneficial for you!
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John Hehir