“Total and permanent disability” is a term that's used to define disability in different contexts, and it can have certain legal ramifications. For example, to qualify for Social Security Disability Insurance benefits, you need to prove to the federal government, specifically the Social Security Administration, that you are permanently and totally disabled. Additionally, people with student loan debt may be able to discharge their loan balance if they become totally and permanently disabled.
If you have disability insurance, the insurance company also makes a distinction between a disability that is partial and temporary vs permanent and total. Total and permanent disability insurance isn't a distinct policy in the U.S., but if you are totally and permanently disabled, you may qualify for certain benefits. For example, a long-term disability policy can replace your income when you can’t work due to illness or injury, including situations when you become totally and permanently disabled.
What qualifies as total and permanent disability?
In general, to be considered totally and permanently disabled, your condition must be so severe that you can no longer work at your job the way you had before, usually for the rest of your life. It may also mean the impairment is permanent, and that you have little to no chance of recovering from it.
Common examples of conditions that might qualify as permanent and total disabilities can include:
Paralysis or loss of limbs
Mental illnesses, like schizophrenia
What’s exactly considered a total and permanent disability depends on the type of disability benefits you're trying to qualify for.
For example, when it comes to Veterans Administration disability benefits, “total” and “permanent” disability have separate definitions, and if you do qualify for the Department of Veterans Affairs’ definition of permanent and total, that doesn’t mean you automatically qualify for Social Security Disability benefits.
Qualifying for Social Security disability insurance
Social Security disability insurance (SSDI) is a government-run program that pays you benefits if you can prove that you are totally and permanently disabled. The Social Security Administration has its own definition of what’s considered total and permanent and a list of disabling medical conditions that would qualify. We don't recommend relying on this type of disability insurance because the benefits are small and it's very difficult to get approved for them.
To receive SSDI benefits, you have to show that your injury or illness is so debilitating that you can't work at your current occupation or adjust to other types of work. That means you won’t qualify for SSDI benefits if you can work a less physically exhausting job, even if it pays much less than your previous job.
Long-term disability insurance policies that offer coverage for years at a time may be your best bet to replace your income in the event of total and permanent disability. Not only do you not need to be totally and permanently disabled to get benefits, you'll also enjoy a much larger payout during the benefits period. You can get free disability insurance quotes with Policygenius.
What is total and permanent disability insurance?
Total and permanent disability insurance isn't necessarily a specific type of policy that you can buy. In general, disability insurance is meant to protect your income in case you suffer an illness or injury that leaves you unable to work.
If you have a long-term disability policy, it should pay you benefits in the event that you become totally and permanently disabled. In order to receive disability benefits, your condition needs to fall under your insurance company’s definition of disability. It might be defined as not being able to do your original job, (own-occupation), or it might mean you’re unable to do any job (any-occupation disability insurance).
Given the severity of most permanent total disabilities, it’s likely that you’d be able to receive benefits under either type of disability insurance, but it depends on the details of your policy. (For example, you might have an exclusion.)
Total disability benefits for a long-term policy could pay out until you retire. If you have short-term disability insurance, your benefits wouldn’t pay out for more than a year, so it may not be sufficient if you have a total and permanent illness that puts you out of work for the rest of your life.
Presumptive total disability rider
Another way you can protect your income in the event of total and permanent disability is by adding a rider for presumptive total disability. The rider pays out total disability benefits in the event that you suffer a permanently disfiguring impairment, like the loss of your sight, hearing, speech, hands, or feet.
Most policies include this disability rider at no cost, and the insurance company pays out the benefits right away, regardless of employment.
With traditional long-term disability coverage, you have to wait out an elimination period (which can be 90 days) to receive disability insurance benefits. But the presumptive total disability rider has no waiting period and pays out the full benefit regardless of your employment status. For example, if you become blind, you will still receive benefits even if you are still able to continue working in your previous job.
Total and permanent disability (TPD) discharge for student loans
If you have a total and permanent disability, you can have your outstanding federal student loan balance discharged. In order to do this, you have to apply for a total and permanent disability (TPD) discharge through the U.S. Department of Education.
TPD discharge includes relief from the following federal financial obligations:
William D. Ford Federal Direct Loan (Direct Loan)
Federal Family Education Loan (FFEL Loan)
Federal Perkins Loan (Perkins Loan)
Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation
Qualifying for student loan disability discharge
To be eligible for student loan discharge due to total and permanent disability, you'll have to provide proof in one of the following ways:
A medical doctor (M.D. or D.O.) determines that you're unable to complete "substantial gainful activity" because of an injury or illness for a period that has lasted or will last at least 60 months, or which could result in your death. The Department of Education defines substantial gainful activity as “a level of work performed for pay or profit that involves doing significant physical or mental activities, or a combination of both.”
The Department of Veterans Affairs declares you unable to work due to a disability incurred as part of your military service that results in a 100% disability rating, or you are disabled based on an individual unemployability rating.
The Social Security Administration has determined that you're unable to complete "substantial gainful activity," and you’re receiving Social Security Disability Insurance benefits or Social Security Income.
Once you have the right documentation, you have to forward it to Nelnet, the government's TPD servicer, either through mail, email, fax, or by uploading it to their website. Nelnet will alert your loan servicer and ask them to suspend collection for 120 days, and during that time you must submit the official application. Whether or not you’re approved or denied depends on which of the methods you are trying to qualify under (listed above).