Total permanent disability insurance
Encyclopedia
Total Permanent Disability (TPD) is a phrase used in the insurance
industry and in law
. Generally speaking, it means that because of a sickness
or injury
, a person is unable to work in their own or any occupation for which they are suited by training
, education
, or experience
. An individual or group of individuals can insure themselves against it through a disability insurance
policy, as part of a life insurance
package or through worker's compensation insurance.
defines a permanent disability is one that "will remain with a person throughout" his or her lifetime, or he or she will not recover, or "that in all possibility, will continue indefinitely."
Insurance companies often have slightly different definitions of what determines permanent disability. However typical definitions would include:
and province
has a definition of permanent disability
Under No-fault insurance
law, New York
defines significant injury as including a permanent loss of use.
in that the insured person must be permanently disabled for the insurer to pay out, rather than just absent from work for an extended period of time.
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
industry and in law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
. Generally speaking, it means that because of a sickness
Sickness
Sickness may refer to:* Illness* Disease* Nausea* Sickness behaviorIn popular culture:* The Sickness, an album by Disturbed* The Sickness , a book in the Animorphs series...
or injury
Injury
-By cause:*Traumatic injury, a body wound or shock produced by sudden physical injury, as from violence or accident*Other injuries from external physical causes, such as radiation injury, burn injury or frostbite*Injury from infection...
, a person is unable to work in their own or any occupation for which they are suited by training
Training
The term training refers to the acquisition of knowledge, skills, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies. It forms the core of apprenticeships and provides the backbone of content at institutes of...
, education
Education
Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...
, or experience
Experience
Experience as a general concept comprises knowledge of or skill in or observation of some thing or some event gained through involvement in or exposure to that thing or event....
. An individual or group of individuals can insure themselves against it through a disability insurance
Disability insurance
Disability Insurance, often called DI or disability income insurance, is a form of insurance that insures the beneficiary's earned income against the risk that a disability will make working uncomfortable , painful , or impossible...
policy, as part of a life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
package or through worker's compensation insurance.
Definitions of permanent disability
Ballentine's Law DictionaryLaw dictionary
A law dictionary is a dictionary that is designed and compiled to give information about terms used in the field of law.Nielsen 1994 discusses different types of law dictionaries. A distinction is made between different types of law dictionaries. A monolingual law dictionary covers one language, a...
defines a permanent disability is one that "will remain with a person throughout" his or her lifetime, or he or she will not recover, or "that in all possibility, will continue indefinitely."
Insurance companies often have slightly different definitions of what determines permanent disability. However typical definitions would include:
- Loss of two of: eyes, arms or legs.
- Absence from work for six months due to an accident or illness, without expectation of returning to work.
United States & Canada
Under Worker's compensation law, each stateUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and province
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
has a definition of permanent disability
Under No-fault insurance
No-fault insurance
In its broadest sense, "no-fault insurance" is a term used to describe any type of insurance contract under which insureds are indemnified for losses by their own insurance company, regardless of fault in the incident generating losses. In this sense, it is no different from first-party coverage...
law, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
defines significant injury as including a permanent loss of use.
Distinctions
TPD differs from income protection insuranceIncome protection insurance
Income Protection Insurance is an insurance policy, available principally in the United Kingdom and Ireland, paying benefits to policyholders who are incapacitated and hence unable to work due to illness or accident...
in that the insured person must be permanently disabled for the insurer to pay out, rather than just absent from work for an extended period of time.