Critical Illness Insurance - Total and Permanent Disablement
A critical illness policy may also provide 'total and permanent disablement' cover, which pays out if the insured person becomes totally and permanently incapable, for reason of ill health, from working (see below for definition of 'working').
For the avoidance of doubt, the Total and Permanent Disablement cover is in addition to the full range of named illnesses, and if the insured person is diagnosed as suffering from a named critical illness, they will be paid out, even if the illness does not result in their being totally and permanently disabled.
What does 'total and permanent disablement' mean?
Don’t be put off by the phrase 'Total and Permanent Disablement' because it does NOT mean (unless you have the ANY occupation definition) that you have to be unable to carry out any work whatsoever.
It depends upon the definition that is offered to you. The five definitions are outlined below.
The exact wording of your relevant definition would be clearly stated in your policy document.
OWN OCCUPATION:
You are unable by reason of illness or injury to perform the material and substantial duties of your occupation.
Material and substantial duties are those normally done in your occupation and which cannot reasonably be left out or changed by you or your employer.
SUITED OCCUPATION:
You are unable to perform the material and substantial duties of your occupation and any other occupation for which you are suited by reason of education, training or experience.
Material and substantial duties are those normally done in your occupation and which cannot reasonably be left out or changed by you or your employer.
ANY OCCUPATION:
You are unable to carry out any work whatsoever.
This is an extremely poor definition and by the letter of the wording you would have to be so severely disabled as to literally be unable to do any work of any description before the a policy with this definition would pay out. However, the Financial Ombudsman Service takes the view that this is an unfair contract term.
WORK TASKS:
You would have to be unable to carry out a minimum number (typically 3) out of a list of 10 or so typical working tasks.
ASPECTS OF DAILY LIVING / FUNCTIONAL ABILITY TESTS:
You would have to be unable to carry out a minimum number (typically 3) out of a list of 10 or so typical aspects of daily life, for example, sitting, kneeling, bending, etc.
