Income Protection (IP) Insurance up to 65 Years of Age and Total Permanent Disablement (TPD)

I have TPD within my super fund. I would now like to buy Income Protection (IP) within the same super fund. There is an option to buy IP up to 65 years of age. As the IP is for up to 65 years of age, would the TPD apply? Two payouts is not necessary in my case, so I was wondering if I could save money by dropping the TPD once I have IP up to 65 years of age. Thank you for your advice.

 

IP insurance over mid 50s an be very expensive and will step up so by age 65 the cover may be negligible at best and cost a mint. Most IP polices will pay UP TO age 65 so what would you be insuring at age 65 ? Discuss with the fund as each policy and situation varies. Financial advice is potentially wise.

IP has conditions that may make it less viable in super eg own occupation, any occupation and obviously wont cover redundancy. Then the test for IP claims is whether the fund can pay the member !! eg If you dont meet a condition of release the fund may be unable to pay out. eg You get covid and are laid up for 2 months and are expected to recover. TPD doesnt apply and the wait period is not exceeded. What condition of release ? You arent dying, you havent retired and so on.

IP insurance should also consider things like your accrued sick leave, LSL and buffers to exist before reliance on a claim. IP insurance outside super can be more effective in many cases.