Life Insurance - The value of ITP (Total and Permanent Invalidity) can be misleading
If you took out life insurance at the bank when you bought your house, check your policy and see what cover you have in the event of invalidity... you may think you're protected but you may not be...
IAD or ITP (DPAC) - Which one do you have?
Have you ever seen the percentage of ITP in your life insurance policy?
When applying for a mortgage, it is compulsory to take out life insurance. However, there are two types of life insurance: with IAD or ITP.
What's the big difference?
In both cases, death cover is pre-defined in a life insurance policy. Whether it's IAD or ITP is purely down to the Invalidity guarantee.
Life insurance with IAD (Absolute and Definitive Invalidity)
The IAD may be activated by the insured in the event of an accident or illness resulting in a total disability that the consumer is gainfully employed.
IAD life insurance assumes that the incapacitated person needs a third person to look after their basic needs (i.e. eating, dressing, getting around, personal hygiene) - we are therefore talking about a degree of incapacity that could be above 80%, be at “vegetative state”.
The cover associated with the IAD is what is normally required by banks.
Life insurance with ITP (Total and Permanent Invalidity)
On the other hand, the ITP can be activated from a degree of invalidity of 60% (Right Option), although this value can vary depending on the insurer.
It applies when a person has suffered an accident or suffers from an illness that renders them unable to exercise a profession or gainful activity, but they are not totally disabled and do not depend on others.
The above differences lead us to conclude that the ITP is more comprehensive than the IAD, as it requires a lower degree of disability in order to be used. ITP is generally more expensive because it is more comprehensive.
However, it's important to check your policy to see how much ITP you have, as 60% is completely different to 75%
In the first, for example, someone who has had cancer is covered and receives the capital while continuing with their normal life and monitoring the health problem, in the second, the 75%, only those who have an almost vegetative disability receive it.
Read the conditions of your policy and see what percentage you have. If you have any questions, don't hesitate to contact us. We'll be happy to analyse your insurance and clarify any doubts and options.
Talk to your intermediary and make sure you have the right, up-to-date insurance, with savings that can reach 50% in some cases.
Contact us - 214 131 310
Grumese, always with your confidence.
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