What does Total and Permanent Disablement (TPD) really mean?

Published 08 May 2018

In simple terms TPD doesn’t mean anything. TPD, which is abbreviation of Total and Permanent Disability (or Totally and Permanently Disabled), is a name for a kind of life insurance based policy.[1] TPD doesn’t mean anything, as it simply refers to a class of insurance contracts, which can have varying specifications.

The insurance industry has given the term TPD some parameters, to standardise the underwriting and product disclosures– making it easier for the insurers to sell and transfer products – and hence the policies are being written in a similar way. That being said, TPD is firstly not cover for an injury or disability, in that the policy does not respond to a particular medical condition. If one is injured and has a permanent and total disability to the leg for example, this is completely separate to TPD. The kinds of policies that pay in those events are generally called Trauma or Accident policies.

TPD pays in the event of an insured becoming incapacitated for work as a result of injury or illness (there are usually other alternative clauses which are harder). That definition is usually written unable or unlikely to work – these have been determined by the court to be essentially the same.[2] The court tells us that, on either wording, to be TPD means that one has “no real chance” of working in future as a result of sickness or injury.[3] But this is still not very clear, does that mean any job or just previous jobs, and how about retraining?

The answer is that it depends: a policy taken out personally (what the insurer calls retail policies) can be worded either to a specific job (Own Occupation) or any job (Any Occupation); however an insurance in superannuation has to be for Any Occupation. The reason for this is complicated, but it has to do with the superannuation regulations[4] and tax deductions[5] – suffice to say it is now accepted practice that all new TPD policies in superannuation are of the Any Occupation kind.

The Any Occupation definition requires a person to be “realistically unable to ever return to any job.” The emphasis of the definition is on the word ANY, and not on a qualifier as to past experience. The policy pays when one is “unable to ever return to any job they can realistically do” AND NOT “I cannot go back to my previous job.” If a person can do some work, or can easily retrain, the court will find against the claimant.[6] In short the TPD definitions are very specific: one would need to provide they cannot realistically work again to succeed in such a claim. That is multi-faceted and not straight forward, and requires expertise.

At Gerard Malouf & Partners our lawyers have experience in conduct and advising in TPD insurance. Should you have an insurance claim of TPD please feel free to contact our firm on 1800 004 878 and speak with one of our lawyers for a free consultation.


[1] c.f. s9A(1)(b)(ii) & (iii) Life Insurance Act 1995 (C’th)

[2] TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim [2016] NSWCA 68 (7 April 2016) at para 208

[3] Ibid at para 89

[4] s62 Superannuation Industry (Supervision) Act 1993 (C’th)

[5] TR 2012/6 at para 118

[6] c.f. Hannover Life Re of Australasia Ltd v Dargan [2013] NSWCA 57 at 278

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