The definition of Total and Permanent Disability or TPD is generally the same with slight variations with different insurance companies. The definition below is taken from the website of NTUC Income.
Total and Permanent Disability is defined as:
i. the complete and continuous inability of the Insured at that time and at all times thereafter to engage in any business or occupation or perform any work of any kind for remuneration or profit; or
ii. Total Physical Loss.
Total Physical Loss means any one of the following:
i. the total and irrecoverable loss of sight of both eyes.
ii. the loss by complete severance or total and irrecoverable loss of use of both limbs at or above the wrist or ankle; or
iii. the total and irrecoverable loss of sight of one eye and the loss by complete severance or total and irrecoverable loss of use of one limb at or above the wrist or ankle.
Why am I bringing this up ? If you are thinking that the TPD clause in your policy will pay out a sum of money under the circumstances that you are disabled and unable to work, this may not be true. Do scrutinize the exact wordings of the definition of your policy.
If you look at the (i), it literally means that you lose your ability totally to earn any income. What about cases where you are permanently disabled but you are still able to sell tissue papers on the street or do some online administrative work from home ? You may not be able to claim under the TPD clause.
As for section (ii), notice that the physical losses that you are suffering from must be in pairs. For example, both eyes, limbs or an eye plus a limb. And if you are disabled, it may not be sufficient as the limbs must be completely severed or total and irrecoverable loss of use of limbs.
In fact, the phrase “total and permanent disability” is rather self-explanatory. Bear in mind that it is not total or permanent disability but it is total and permanent disability. A single word makes a lot of difference.
In short, it is extremely difficult to make a full claim under this TPD clause. If you still wish to preserve your income stream in the unfortunate event that you are disabled and not capable of working, take up a disability income insurance policy instead.
Posts
Hi,
ReplyDeletenice post, but usually disability income only insure 70-80% of your monthly income.
Regards,
Liang
Hi Liang,
ReplyDeleteIn the event that you are unable to work completely, having 75% of your previous work income being channeled to you will be very significant financially.
Kay