A total and permanent disability (TPD) is a significant injury or illness that prevents you from working and is expected to last for the rest of your life. There’s no definitive list of total and permanent disabilities, but the loss of more than one limb or an accident that leaves you paralyzed are common examples.
If you’re considered totally and permanently disabled, you may qualify for benefits from the government, including loan forgiveness. If you have disability insurance, it will pay out according to the terms of the policy, but you may be able to receive payments for years or even decades.
What does total and permanent disability mean?
A total and permanent disability describes an injury or illness that prevents you from working, usually for the rest of your life.
But the term total and permanent disability has slightly different definitions depending on whether it’s used by an insurance company or a government-run program, like Social Security or Veterans Affairs (the VA).
Some conditions that often qualify as permanent and total disabilities include:
Blindness
Paralysis or loss of limbs
Serious nerve damage
Autoimmune diseases
Chronic illnesses
Terminal illnesses
Total and permanent disability insurance coverage
For insurance companies, a total and permanent disability is a specific type of total disability (compare it to a total and temporary disability, which is a serious illness or injury that is expected to improve).
There’s no specific type of policy called total and permanent disability insurance in the U.S. — although this does exist in other countries, like Australia.
In order to be considered a total and permanent disability, the injury or illness in question has to prevent you from ever returning to work in your field (or to a job that matches your education and training).
Long-term disability insurance can cover disabilities that last a year or more. A long-term policy protects your income by paying out benefits while you’re out of work, up to the maximum length of time listed in your policy.
In order to receive benefits from a disability insurance policy, you have to have bought the policy before becoming totally and permanently disabled. If not, your insurance company will consider the disability a pre-existing condition and won’t cover it.
Many disability insurance policies have a feature called a presumptive total disability rider, which speeds up the waiting time for benefits if you have certain permanent disabilities, like loss of sight or hearing or the loss of multiple limbs.
What about short-term disability insurance?
Many people get short-term disability coverage through their job, but, since short-term benefits only last up to a year at the most, this type of coverage doesn’t provide enough protection for long-lasting disabilities.
Read whether short-term disability insurance is worth it
Social Security benefits for permanent disabilities
The Social Security Disability Insurance program (SSDI) also offers benefits, though it has its own definition of total and permanent disabilities. To qualify for coverage:
You can’t work in a job that requires substantial physical or mental activity, also called substantial gainful activities (SGA).
You can’t do the work you used to or adjust to new types of work.
Your condition must be expected to last for at least a year or result in your death.
This means that it’s possible to be considered totally and permanently disabled by your insurance company but not qualify for SSDI — like if you can’t work in your specialized medical field but you could still work in another job.
That said, if you think you qualify for benefits, check the list of disabling events that SSDI covers and apply — certain terminal conditions may qualify for expedited benefits.
Don’t plan to rely on SSDI alone. While you can collect SSDI benefits for decades, the average benefit is only about $1,700 a month, much less than what private disability insurance pays.
Read more about how SSDI compares to long-term disability insurance
Total and permanent disability discharge for student loans
The Department of Education may discharge certain federal loans if the VA, Social Security Administration, or your doctor prove that you have a total and permanent disability. A discharge means you no longer have to repay:
A William D. Ford Federal Direct Loan (Direct Loan)
A Federal Family Education Loan (FFEL Loan)
A Federal Perkins Loan (Perkins Loan)
A Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation
To qualify, your condition must prevent you from working and either be terminal, likely to last 60 months, or have already lasted at least 60 months. If you’re approved because of a doctor’s recommendation, you’ll have to go through a three-year monitoring period.
3.
Social Security benefits for permanent disabilities