Aaron Dunn looks at some of the changes flowing from the Stronger Super reforms and how those changes will affect SMSFs. The new financial year will see the introduction of several changes stemming from the Stronger Super reforms to improve the operation and regulation of the self-managed super fund (SMSF) sector.
TPD insurance is short for 'Total and Permanent Disability'. This type of insurance cover provides a lump sum to the owner of the policy, in the event of the life insured suffering an injury or sickness that makes them totally and permanently disabled. In other words, unable to return back to work ever again.
Why have TPD Insurance?The most common uses for TPD insurance payments are for:
- Repayments of debts (mortgages, car loans, personal loans, business guarantees)
- Rehabilitation costs
- Medical expenses
- Providing a lump sum amount to cover the cost of living for your spouse / children especially where the insured was the major breadwinner in the family
- Enhancing lifestyle changes and modification of home / car due to disability
What types of TPD is available?You can generally choose two options in regards to the occupation definition for TPD. They are:
- Any Occupation - you are able to make a TPD claim if you are permanently disabled and unable to perform any occupation that you are suited to by education, training or experience.
- Own Occupation - you can claim if you are permanently disabled and unable to work in your usual occupation or chosen field of employment.