If you have life cover in place (but skipped past disability cover), it’s probably because you have an unanswered question: When exactly does disability cover pay-out? Taking out life insurance is easy enough, once you’ve made up your mind that you need it. You die, and the insurer pays out. It’s straightforward and uncomplicated because the event (your death) is simple to get your head around. Disability cover, mmm, not so cut and dry. What exactly are you getting? Nobody wants to spend too much money on insurance in the first place, and if you aren’t exactly sure what you are buying, then the decision to not do anything, often seems like the correct decision.
So how disabled do you need to be before you can claim?
That’s the question you need answered.
It depends on the definition in your policy wording.
Insurance is a contract between the insurer and the insured (that would be you). Every contract has a set of terms and conditions and an insurance contract is no different in this regard. In exchange for your premiums, the insurer is offering to pay out a pre-determined amount of money, on a specific event. That specific event is defined in your policy wording…the stuff we are all guilty of not reading.
In a nutshell: It’s all in the Ts&Cs
Our Disability Cover definition is simple:
Our Disability Cover will provide you with a single pay out, in full, if you are totally and permanently unable to perform your insured occupation (and any similar occupation to which you are suited by skill, education and training) due to a disability, through illness or injury.
Let’s break that definition down into bite-size pieces:
We will pay out the sum you insured yourself for:
- If you are totally and permanently disabled
- And unable to perform the functions of your occupation or similar occupation
- Due to disability resulting from illness or injury
The important thing to remember is that your disability needs to be total and permanent. If you’ve had a minor car accident, and you are in hospital for a week recovering from a sore back, you can’t claim. Your disability isn’t total or permanent (in fact, at best you are just a little incapacitated). However, losing an arm in a car accident is something you can’t recover from. That would be a total and permanent disability in anyone’s book, including ours.
Why does your occupation count for so much, when it comes to a disability claim?
Your ability to earn an income is dependent on your specific set of skills. That skill set defines the type of job you have, and in many respects the type of money you take home every month. A brain surgeon has a very specific set of skills, wouldn’t you agree? If a brain surgeon lost his arm in a car accident it would be impossible for him/her to continue being a brain surgeon.
Our Disability cover definition asks the question: Are you able to perform the functions of your occupation or a similar occupation?
In the case of the brain surgeon, it’s obvious that the answer is No. A brain surgeon, who has lost an arm, can’t operate at all and couldn’t perform a similar occupation because all surgery requires the use of two arms.
We have established that your disability needs to be total and permanent. We have also established that to have a valid claim your disability needs to prevent you from doing your job or a similar job you are qualified to do, in terms of your skills and training.
The last point worth touching on is the fact that your disability can be because of illness and an accident in terms of our definition. If you were diagnosed with Motor Neuron Disease or became disabled in a swimming pool accident, we would pay, provided the claim met our definition.
How much disability cover do you need?
We can provide you with up to R10 million cover without you completing any medical examinations. The easiest way to work out how much disability cover you need is to ask yourself the following questions:
- How much debt would need to be settled if I became disabled & was unable to work?
- How much income would I need each month to support my family?
- Would I have any additional medical bills because of the disability?
- Would I need to make any modifications around the home?
- Would I need to buy a new vehicle because of my disability?
When do we not pay out?
- If you are injured while actively participating in war, civil commotion, insurrection, riot, usurpation of power, terrorism or acts of terrorism.
- If you are disabled because of an intentional or grossly negligent self-inflicted injury.
- If you fail to follow reasonable medical advice to prevent, minimise or repair the disability.
- If you are disabled due to excessive consumption of alcohol, intentional inhalation of fumes or intentional or negligent consumption of poisons, drugs, narcotics or medication (unless prescribed by an independent medical practitioner and used as prescribed).
- Certain specific exclusions (which will be very clearly communicated during the process of buying a policy with us) based on your health or your lifestyle.
Ready to take out disability cover?
Start with checking what your company offers in the way of disability cover. If you belong to a company retirement fund, there is a good chance that group life and disability benefits will be included.
Then work out how much disability cover you need, and click here for a quote.
Until next time.
The Wise About Life team.