October 31, 2022
Hear Disability Insurance Coverage: What It Is and Why You Need It
While life insurance provides financial protection for your family in the event of an unfortunate death, health insurance covers the cost of medical expenses resulting from an accident, injury or illness. Both of these coverages are key to securing your financial future and that of your family, because you don’t have to liquidate your investments or resort to emergency loans, and the insurance policy takes care of that. However, it is possible that due to an illness or an accident, you may have to suffer a sudden disability that forces you to give up your job and ultimately stop your income. Many of us do not know what could be done in such a situation, because neither a regular health insurance plan nor a life insurance plan could offer help. Disability insurance coverage is one solution that can help you manage such a difficult situation without any financial stress.
What is disability insurance coverage?
Disability insurance provides financial coverage for loss of income due to the insured person’s inability to work due to permanent or temporary disability. In other words, it replaces your lost income if you are unable to work in the short or long term due to accident or illness, while covering actual medical expenses.
While health insurance covers medical expenses resulting from an accident or illness, a disabled person will always have fixed expenses like rent, children’s school fees, EMI loans, etc., which can become a financial burden when revenues drop or stop suddenly. Since life insurance and health insurance do not cover loss of income due to disability, it makes sense to purchase a separate disability insurance policy or top-up disability insurance with your insurance policy. basic life or illness.
Here’s why you should buy disability insurance:
You may be required to be absent from your work:
Spinal cord injuries or serious accidental injuries can leave a person bedridden. Likewise, serious illnesses like cancer, diabetes, mental illnesses, etc. can lead to disability. Such a disability can lead to short-term absences of up to two years, which can result in loss of pay for the days of absence. Having disability insurance coverage ensures you get paid if you lose income during the days you can’t work, as well as covering expenses such as medical care, medication, etc.
It replaces your lost income:
A permanent disability can prevent you from working and lead to the loss of your job. In such a case, paying your daily expenses such as house rent, groceries, electricity bills, EMI loans, and children’s tuition/college fees might be difficult. But disability insurance can replace your lost income so that you and your loved ones continue to live the same lifestyle even if you lose your job due to disability.
Your family depends financially on you:
When you are the sole breadwinner and your family depends on you, it is imperative to take out disability insurance. Even if you have enough savings and investments, a few months without income can deplete your savings and it can become financially stressful to manage regular expenses.
It makes sense to buy when you’re young and healthy:
Many of us think we are too young and healthy to worry about illness and injury. But life is uncertain and a medical emergency can strike at any time without warning. It is impossible to purchase insurance after encountering an unfortunate event. Therefore, it is advisable to purchase disability insurance when you are young and healthy.
How does disability insurance coverage work?
Disability insurance coverage depends on the policy you purchase. However, it usually works as mentioned below:
Like any other type of insurance, to keep disability insurance coverage uninterrupted, you must pay premiums regularly.
Compensation is offered as a percentage of your earned income, usually 60% to 80% of your income, depending on the type and degree of disability.
In the event of short-term disability, a weekly indemnity is offered to compensate for the loss of income of the insured. The amount of this benefit and the period are specified in the policy, which vary from one insurer to another.
In the event of permanent complete disability due to an accident, insurers generally offer 125% of the sum insured.
Some insurers offer a waiver of premiums in the event of partial disability.
Insurers provide details of the percentage of the sum insured offer depending on the type of disability, such as loss of sight in one eye, loss of sight in both eyes, loss of a limb, loss of two limbs, loss of one eye and one limb, loss of hearing (one ear and both ears), loss of speech, etc., which it is advisable to check before buying the plan.
The minimum and maximum sum insured varies from insurer to insurer.
In today’s hectic lifestyle, disability insurance coverage is a necessity for all earning family members. Before buying the policy, it is advisable to compare different types of disability insurance and insurance providers and choose the right policy for you. Also, read the terms and conditions and exclusions carefully to avoid any disappointment or disputes in the future. In order to get a prompt settlement of the claim, be sure to notify the insurer immediately after the incident and do not fail to provide all the correct information when purchasing the policy and filing the claim. .