Factors that affect the cost of TPD insurance
Insurance policies are provided to buyers who feel the need to invest in their futures and protect their families from unseen situations that can lead to financial upsets due to loss of limbs, loss of life and loss of income. The cost for tpd insurance plans is based on a few fixed and variable factors which include the applicant’s lifestyle, occupation, age, gender and policy benefits.
The applicant’s risk level will be assessed by the insurer and various factors such as the smoking status, BMI, activity level, medical history and sports involvement will be taken into consideration before a final quote is given to the applicant.
Smokers, people with pre-existent health conditions, people who are obese or morbidly obese and people who play rough or extreme sports are likely to be asked to pay high premiums.
The applicant’s occupation will also be taken into consideration by the insurer before the applicant gets a final quote. If the applicant is a miner, works in construction, does manual labour or risks his life in any way at work then he will be considered as a high risk buyer and will have to pay higher premiums compared to employees or self employed individuals who are at a lower risk for injury.
Age and Gender
Men are considered to be more likely candidates to file TPD insurance claims. Older adults are also considered to be more likely candidates to file TPD insurance claims.
Younger adults, women are considered to be low risk buyers provided they do not smoke, do not indulge in risky behaviours such as riding a fast bike and do not in any other way make the insurer believe that they are likely to file a claim easily.
Perhaps the most important factor that is taken into consideration by the insurer is the benefits of the policy. The waiting period and the compensation amount will largely influence the insurer’s decision for TPD premiums; however the terms, definitions and exclusions if any will also influence the insurer’s decision while the insurer decides the premiums for your cover.
What you can do to lower your premiums
To lower your premiums, you may either have to opt for a plan with limited benefits or you may have to take some tough decisions about your lifestyle. If you opt for a plan with limited benefits such as restrictive definitions, a longer waiting period and a smaller compensation amount then chances are that these restrictions can cause problems later on when it is time to file a claim.
If you opt for a plan after making a few changes to your lifestyle such as quitting smoking for 12 months, giving up riding a fast bike, giving up driving a fast car or quitting rough and extreme sports that are most likely to injure you, then you can get a cheaper policy.
This being said, comparing plan, getting multiple quotes and weighing the pros and cons of the selected plans after talking to an insurance expert who can give personalized advice are a few other ways to get cheaper quotes. Comparing plans involves using the free services of insurance comparison websites to understand the terms, limitations and pricing of the selected plans.
Getting multiple quotes involves using the free services of an insurance comparison website to get 3 or more quotes from different insurers who offer similar insurance plans.
The main benefits of contacting an insurance expert for personalized advice is that, you can get insurance advice as per your lifestyle, financial needs and insurance needs by hiring an expert online, via the phone or by visiting the selected expert in person.
Leading insurers that offer TPD insurance
OnePath, MLC and Asgard are three of the insurers that offer TPD plans. Other leading insurers that offer these plans include, MetLife, Care Super, MBF, AVA, AIA, Work Safe, Plum, Australian Super, Comm Insure and SunCorp.
There are three ways buyers can purchase a TPD plan:
- The first way is to visit an insurer’s website and purchase the selected plan after getting a quote.
- The second way is to visit an insurance comparison or insurance agent’s website and purchase the selected plan after getting multiple quotes by following a few easy steps.
- The third way is to contact the manager of your superannuation fund and apply for a policy in person or via the phone. Insurance comparison websites may offer quotes, estimates and policies from other insurers in Australia as well.
Why purchase the best TPD policy you can afford?
The best TPD plan may not prevent you from getting disabled; but the best TPD plan will ensure that you get the payout from the insurer in time and that this payout is adequate for you and your family while you are adjusting to your new lifestyle.
While getting a policy with high premiums may seem troublesome at first, there are many ways you can lower the premiums. For instance, purchasing plans after comparing them can help you get the best plan you can afford and paying premiums to the insurer in advance every year may get you a discount on your yearly premiums.
Usually the higher the premiums are the higher the discount you can get if you pay the premiums in advance. Quitting smoking for at least 12 months before purchasing a plan is another way you can save a significant amount on premiums. Losing even 10% of excess fat before purchasing an insurance plan is another good way to get premium discounts while improving your health.
Opting for a longer waiting period is one of the easiest ways to get a cheaper plan; however you should do this only if you have funds to fall back upon in case you are disabled while the waiting period is active, since during this period all claims and disabilities will not be paid for by the selected insurer.