Group Disability

Disability cover is designed to replace lost income (some) if we find ourselves unable to work due to illness or accident. As we age, the risk that we suffer some disability is far, far greater, than our chance of death before age 65.

Group Disability Policies are provided on the basis of some percentage of salary... usually 50%-75%. Insurers do not allow for full cover as they want us to have an incentive to go back to work!

In terms of definition of disablement, most Group Disability policies define disablement along the lines of our being unable to perform the important duties of our jobs during the first 2 (possibly 5) years and then after 2 years, there will be a review to consider whether we are able by 'knowledge, training or ability' to undertake another occupation. This review purely looks at our physical ability and does not consider the chances of finding such work or not.

It is possible we may suffer a critical illness and yet still be able to put in a reasonable days' work.. Disability claims are only paid in response to our inability initially, to do the important duties of our job.

Generally there will be an option for a 90 or 180 day waiting period and often times there will be a ceiling age of 60. Reason for age 60 is the insurers know that a high percentage of disabilities will occur after age 60!

Like Critical Illness, there will likely be a maximum monthly benefit of perhaps USD5000 or at the most, USD10,000 per month.

Personal Accident

Often an emotive or instinctive buy, Personal accident cover will commonly be equivalent of the sum insured of the life cover. It pays out a lump sum in the event we die by accident or suffer loss of two arms and two legs loss of an eye or ear or two etc, with a reduced percentage given for lower levels of disablement, such as loss of a finger or toe.

It does not cost much but is difficult to claim, as apart from a gross injury of some kind, the definition of disablement is really a 'vegetable' clause, something like our 'inability after 6 or 12 months to undertake ANY occupation'.