An introduction to Disability Income Insurance Policies

What are Disability Income Insurance policies?

Disability Income insurance policies pay out on a monthly basis up to 80% of your average monthly salary in the event that the insured is unable to work as a result of an accident or illness. As the purpose of the income is to ease financial difficulties, the payout will not completely replacement income before said accident or illness occurs.

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What are the benefits of a Disability Income Insurance?

Depending on duration and amount of premium paid, monthly income benefit may continue for 5 or 10 years or even up to age 65 depending on the policy offered by the insurer. In the event that the insured continue to work and end up with a lower salary than the monthly income benefit, topping up of differences are usually offered by the insurer. Insurers may reimburse some or all of rehabilitation cost required toward the recovery of the insured.

What else should I consider before taking up a Disability Income Insurance?

Each insurer offering disability income insurance has their own policies terms and conditions, duration of payout and length of deferment period, scope and limits of coverage and available riders among other differences. Definition of disability should be carefully taken noted of as some policies may define disability as not being able to perform your usual job, while other policies may only define disability as not being able to work at all. The premiums for the latter is cheaper due to a lower probability of claiming from the policy, with all other term and condition equal.

Any profession with specific job nature such as artists, doctors, lawyers, and engineers may wish to consider a policy which defines disability as not being able to perform your usual job, as the ability to perform other job scopes such as administrative or teaching may render some disability income insurance non-claimable.

Where can I find out more about the benefits and coverage of Disability Income Insurance?

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