Own Occupation vs Any Occupation TPD - What's the Difference?
When setting up Total & Permanent Disability (TPD) cover, one of the most important decisions is often hidden in the fine print:
Is your TPD policy structured as own occupation or any occupation?
Own occupation and any occupation are not just technical terms – they are the foundation of how a claim is assessed. This definition directly affects whether a claim is paid and the difference can be significant.
What Is TPD Cover?
Total & Permanent Disability (TPD) insurance provides a lump sum payment if you become permanently unable to work due to illness or injury.
Unlike income protection (which pays monthly), TPD is designed to:
- Reduce or clear debt
- Modify your home
- Provide long-term financial security
- Replace future earning capacity
The definitions used in your policy can affect claim time. Let us explain…
Most Insurers use these definitions or form of:
Own Occupation TPD
You may qualify for a claim if an illness or injury means you can no longer perform the specific job you were doing before becoming disabled, even if you could still work in another role.
Example: A dentist develops a hand tremor and can no longer perform dental procedures.
Under own occupation TPD, they may still qualify for a payout because they cannot perform the duties of a dentist, which was their primary occupation.
This definition is often more aligned with:
- Highly specialised professionals
- Tradespeople with physical roles
- Self-employed individuals whose income depends on a specific skill.
Any Occupation TPD
Under an any occupation definition, you must be permanently unable to work in any occupation you are reasonably suited to by education, training, or experience.
This is a stricter threshold. The question is Is there any job you could reasonably do even if:
- The alternative role pays less
- It’s not comparable to their previous career
- It doesn’t replace their previous income
The definition focuses on capacity to work – not income level.
Example: If the insurer believes the dentist could teach, consult, or perform administrative roles, the claim may not meet the any occupation definition.
The importance of structure at application time
Each insurer has slightly different wording and criteria, including waiting periods and income thresholds, so it’s important to review the details of your specific policy. You choose the structure upfront. The insurer applies that structure at claim time.
If someone chooses a policy purely on premium and doesn’t understand the disability definition, they may unknowingly accept:
- A stricter claim threshold
- A higher bar for payout
- Less alignment with their occupation
Disclaimer: Major NZ insurers publish product disclosure statements (PDS) and policy wordings that outline their Own occupation TPD definitions (where offered), Permanent Disability criteria, waiting periods and medical certification requirements.