International Day of Persons with Disabilities: Benefits to coverage, all you need to know about disability insurance

Updated: 03 Dec 2022, 10:00 AM IST

Disability insurance is a type of insurance that provides benefits in the event a policyholder is unable to work or generate income due to disability.

Disability insurance is a type of insurance that provides benefits in the event a policyholder is unable to work or generate income due to disability.

There is a lot of uncertainty in life. While we cannot control the events that may occur in the future, we can prepare to be better equipped to deal with some of them. 

it's all better to be prepared to deal with unfortunate events such as accidents, serious medical issues, etc. as they can have a big influence on our lives and leave us financially stressed. While health insurance helps, you can experience a substantial financial loss if you get a sudden disability and are forced to leave your job—something that not all health insurance companies might cover.

If you are the primary earner for your family and are suddenly unable to support them financially, the aftermath can be difficult. In such situation, disability insurance can help.

What is disability insurance?

Disability insurance is a type of insurance that provides benefits in the event a policyholder is unable to work or generate income due to disability caused by  an illness or accident. 

If the insured person is unable to work because of their disease, it can replace a portion of their income. Depending on the conditions of the policy, the disability insurance plan may also pay for any medical expenses you could have as a result of the therapy.

READ MORE: Here's why you must add a disability rider to your term insurance plan

The most fundamental versions address permanent and temporary impairment brought on by accident. If you become completely and permanently disabled, you will get the whole amount covered. Depending on the level of disability, the insurance will pay a portion of the total cover in the event of a partial disability.

What are the types of disability insurance?

Short term disability

Temporary disability is included in term insurance policies with accidental disability riders. Impairments that have developed as a result of an accident or sickness are referred to as temporary or short-term disabilities. The typical wait time for the short-term insurance coverage might be anything between 0 and 14 days. The maximum length for short-term disability insurance coverage is two years.

Long term disability

The term insurance total permanent disability rider includes a provision for permanent disability as well. It guards you against the financial troubles that might result from mishaps or significant illnesses that leave you with irreversible permanent harm and make you lose your work. It covers a range of diseases, including psychological disorders, cardiac issues, malignant cell rips, and other associated situations.

READ MORE: Health insurance vs critical illness plan: Which one is more appropriate for you?

It is a type of insurance that provides lifelong coverage with a grace period that might extend for weeks or even months. The versatility of this sort of insurance is one of the main reasons why it is so liked.

What is the importance of disability insurance?

Accidents and the disability of a family's main provider can have a substantial influence on an individual's and the family's finances. Long-term as well as short-term disability insurance can cover you and your family in such a scenario.

If an accident leaves you in a state where you are unable to work, you will undoubtedly find it challenging for a while. As a result, paying for large expenses may be assisted by accidental disability insurance.

READ MORE: Buying a term insurance plan? These 4 things you should be careful about

Furthermore, if you don't have disability insurance, the period of time you spend recovering from a disability may be challenging and unpleasant. This anxiousness will make your recuperation time much more unpleasant and it can even grow worse. Thanks to sound disability insurance protection, you may release any stress and focus on your recovery.

Additionally, since the premiums you pay for a disability insurance plan in India are also tax deductible in accordance with the Income Tax Act of 1961, it may help you save money on your taxes.

The minimum and maximum entrance age for disability insurance policies are 18 and 70 years old, respectively. However, different insurance service providers provide different levels of coverage.

It is important to note that disability insurance does not cover every ailment that a person can experience, including some that are not totally determined by fate. It does not provide coverage for any pre-existing medical conditions, injuries sustained during a suicide attempt, or during a conflict.

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First Published: 03 Dec 2022, 10:00 AM IST