One of the most immediate financial pressures for anyone who can no longer work is meeting their mortgage repayments. A TPD lump sum payout can provide the funds to pay off all or part of a home loan — offering significant financial relief and security.
Using a TPD payout for your mortgage
A TPD payout is an unrestricted lump sum — you can use it however you wish, including to reduce or fully repay your mortgage. For many people, eliminating or reducing their mortgage is the most impactful use of a TPD payout, dramatically reducing ongoing financial pressure.
TPD insurance vs mortgage protection insurance
These are different products that are often confused:
- TPD insurance (through super) — pays a lump sum when you become permanently unable to work, due to any condition
- Mortgage protection insurance — pays your mortgage repayments for a defined period if you die, become disabled or lose your job. Often arranged by a bank at loan time.
You may have both, and both can be claimed in the right circumstances.
Financial planning after a TPD payout
A significant lump sum requires careful planning. Consider speaking with a financial adviser about the best way to structure your payout to protect your assets and minimise tax. Start by confirming your eligibility with a free check.