Total Permanent Disability (TPD)

Total permanent disability (TPD) is a condition in which an individual is no longer able to work due to injuries. Total permanent disability, also called permanent total disability, applies to cases in which the individual may never be able to work again.

Total permanent disability may involve an individual’s loss of the use of his or her limbs, with the injuries preventing the policyholder from being able to work in the same capacity as he or she had before the injury. If the policyholder retires or leaves the workforce for any reason other than the injury, coverage may be stopped.

Insurance companies classify disability according to the amount of work that an individual is able to perform. Temporary disabilities prevent an individual from working full-time (called temporary partial disability) or at all for a period of time (called temporary total disability). Permanent disabilities prevent an individual from being able to work full-time for the rest of his or her life, referred to as permanent partial disability, while total permanent disability means that the individual will never work again.

Individuals may insure themselves against total permanent disability through a disability policy. The amount of the benefit is typically a fixed percentage of the policyholder’s average wage, or, in some cases, the average wage of individuals in a geographical region. There is no limit on the number of weeks that an individual can receive benefits if he or she becomes permanently disabled.  

In some cases, the law may allow an individual on total permanent disability to engage in business activities if the benefit provided from a disability policy plus the wages earned from additional work does not pass a certain threshold. Students with loans may have their loans discharged under certain conditions if they face total permanent disability, provided that the injury is expected to last a minimum period of time or result in death.

A person will not likely qualify for a permanent total disability benefits until the associated medical condition is fixed and stable. What this means is as long as there are additional, curative treatment options available, or a doctor thinks you may improve over time, an insurance company will not a person “permanently and totally disabled.” Being in this situation doesn't necessarily mean someone won't eventually receive TPD benefits, but it does mean that a person will have to wait until their medical treatment is complete.