Standalone vs accelerated TPD

The mechanics mirror accelerated trauma. Accelerated TPD sits inside the life cover as a right to take part of it early if you become totally and permanently disabled. Claim $300,000 of accelerated TPD against $700,000 of life cover and $400,000 of life cover remains. Standalone TPD is a separate contract with its own sum insured, and a claim leaves the life cover untouched.

The argument for standalone is stronger with TPD than with trauma. A permanent disability is, by definition, not something you recover from. Care costs continue, earning capacity does not return, and in many cases life expectancy is affected. A family that has spent the TPD lump sum on a house modification and a mortgage reduction still needs a death benefit afterwards.

The argument for accelerated is cost, and it is not a weak argument. TPD is expensive, particularly on an own occupation definition, and cover you can afford to keep beats cover you cancel. Accelerated TPD with a buy-back option, where available, gets close to the standalone outcome for less.

1. 1Write down what the life cover is for — mortgage, children, income replacement for a surviving partner.
2. 2Ask whether each of those needs would still exist after a TPD claim. Usually most of them would.
3. 3Price both structures for the sum insured you actually need, not the one that makes the premium look acceptable.
4. 4Ask whether a TPD buy-back is available and what it costs, since it may close most of the gap.
5. 5If standalone is unaffordable, consider accelerated TPD plus a larger life sum insured, which is often cheaper than full standalone.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Whether TPD is accelerated against life cover, and whether trauma is accelerated against the same amount.
• Whether a TPD buy-back exists, when it can be exercised, and any health conditions attached.
• Whether the standalone product uses the same occupation definition as the accelerated version.
• The expiry age of each structure, which is not always the same.
• Whether standalone TPD includes any death benefit, since many do not.
• How the premium compares over the full period you expect to hold the cover, not just today.

Every New Zealand insurer writes tpd insurance in new zealand to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Buy-back availability on TPD is less common than on trauma and is a genuine point of difference between insurers.
• An adviser can split cover — some accelerated, some standalone — to balance cost against what survives a claim.
• Where cover is held for a business purpose, standalone is usually necessary so a personal claim does not undermine the business arrangement.
• Modelling the post-claim position is a standard adviser exercise and the only way to compare the structures meaningfully.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.