Age-based vs fixed cover TPD insurance

In the complex world of life and TPD insurance, one aspect often overlooked is the difference between different types of TPD insurance. When considering TPD insurance, particularly in superannuation, people are faced with the decision between age-based cover and fixed cover. Each option has its merits, but understanding the differences is key to making an informed choice that suits you.

What is age-based TPD insurance cover?

Age-based TPD cover is insurance cover that adjusts to the needs of policyholders at various life stages. This type of coverage typically correlates with the policyholder's age, offering higher protection levels during important life stages.

The rationale behind age-based TPD cover is based in the recognition that financial responsibilities (eg. getting a mortgage or having a family), fluctuate over time and that there are certain life stages where financial protection are more important.

Benefits of age-based TPD cover

1. Affordability: Young policyholders will often benefit from lower premiums, making age-based cover more affordable during the early years when you may not have many financial responsibilities.
2. Tailored protection: the TPD insurance cover aligns with the changing financial needs, meaning that you have more insurance cover in the critical years during periods when you have a lot of financial responsibility.
3. Flexibility: As you get older, the amount of insurance cover can be adjusted down in periods when you have less financial responsibility, which can mean that you can make the insurance premiums more affordable.

What is fixed cover for TPD insurance?

Fixed cover offers a level of TPD protection throughout the life of the policy, regardless of your age. This means that you know exactly how much insurance cover you have, and it won’t change. However, whilst the amount of insurance won’t change, the premiums will increase over time.

Benefits of TPD insurance fixed cover

1. Stable TPD cover: Fixed TPD insurance cover ensures a constant level of insurance protection regardless of your individual life stage or changing financial circumstances.
2. Long term planning: A person who wants to have a set and forget approach to their insurance cover will know that their level of insurance cover stays the same.

Insurance inside superannuation

Insurance inside superannuation is pretty complicated. On the surface, it can seem straightforward, but once you scratch the surface, it can be very complex.

There are a number of different types of insurance, such as:

• TPD insurance;
• death and terminal illness insurance; and
• income protection insurance.

Get help from a disability insurance lawyer

All the superannuation funds around Australia have different insurance arrangements, which can vary significantly both in terms of the amount of insurance cover offered and the definitions which you need to meet to be able to claim.  

Berrill & Watson Lawyers are a leading superannuation and insurance law firm and we assist people all over Australia to understand and claim their insurance entitlements. If you have a TPD or income protection claim and need help, give us a call for a free discussion about your situation.

Contacting Berrill & Watson

📞 Melbourne: 03 9448 8048

📞 Brisbane: 07 3013 4300

📞 Anywhere else in Australia:  03 9448 8048

📧 [email protected]

How we charge

We are Australia's best-value superannuation/insurance law firm. Other law firms charge nearly double (& sometimes more than double) what we charge. So, if you get a quote from them, or have a cost agreement, ask us what we will charge you.

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You may also like to read:

• Your guide to making a successful TPD claim
• What is income protection and how do income protection claims work?
• Differences in TPD definitions effect how insurers pay out claims