Total And Permanent Disability Insurance – What You Need To Know

total-and-permanent-disability-insurance-example1 A serious illness or accident leading to injury could make it difficult and sometimes impossible to continue working to earn a living. This might seriously compromise your family’s financial stability, which is why it is important to have a safety net in place. With total and permanent disability insurance, you get a lump sum amount if a disablement that is considered permanent results in your inability to work. This should help you cover your normal expenses as well as mortgage repayments, medical expenses and ongoing financial support for your family.

How much cover do you need?

The amount of total and permanent disability cover you need will largely depend on your personal situation. The right amount of cover is essential if you are going to meet all your financial obligations. You should consider how much income your family would need in case you are unable to continue working.

What is considered permanent disability?

The benefit payout from a total and permanent disability insurance is payable when you become totally and permanently disabled. However, the definition of permanent disability could vary with each insurer. Generally, permanent disability may refer to loss of sight, loss of use of arms and legs, or absence from work for six months due to illness or injury when you are not expected to resume normal work. Your insurer may also define permanent disability as the inability to work in any occupation or inability to work in your usual occupation. Note that you will need to successfully meet the definition set out in your policy to receive disability insurance benefits.

Combining insurance covers

When deciding whether you require total and permanent disability cover, you should consider the level of private health insurance and other types of life insurance you may have. You can add your total and permanent disability cover onto your existing life insurance policy for a more comprehensive coverage. However, when you make a permanent disability claim, the benefit amount you get will be deducted from your life insurance cover, click here to learn more.

How much does it cost?

It is important to choose a cover that you will be able to comfortably pay for since you will need to keep up with the premium payment to avoid cancellation of the plan. On the other hand, basing your decision based on price along could ultimately mean that you would be under-insured. The amount of cover you choose will influence how much you will have to pay as premium. Other factors also influence the cost of permanent disability insurance including your age and gender. In addition, individuals in white collar jobs with little risk of permanent disability would probably have lower premiums compared to individuals in what would be considered high risk occupations.

When applying for total and permanent disability insurance, it is important to be completely honest about your personal history. Failing to disclose pertinent information concerning past injuries or illnesses, for instance, could leave you with a worthless policy. The same should be done whenever you renew your policy, as well as informing your insurer about any changes in your circumstances. With total and permanent disability insurance, a lot of pressure is taken off you in case of unforeseen events.

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