Disability Income Insurance

I guess most of you would be familiar with the typical coverage of an insurance policy, namely 'Death', 'Total & Permanent Disability', and 'Critical Illness'. My concern is, what happen if you are unable to work for reasons that cannot fit into the above 3 categories?

In this topic, I would like to touch on the 'Disability Income Insurance (DII)' which is still quite undeveloped in Singapore.

If you look at the definitions of TPD & CI closely:

Firstly, TPD is generally defined as one of the following:

• Total and irrecoverable loss of use of two limbs at or above the wrist or ankle.
• Total and irrecoverable loss of sight in both eyes.
• Total and irrecoverable loss of sight in one eye and loss of one limb.

The actual claim statistics for TPD is usually quite low as one needs to satisfy the stringent requirements for both ‘total’ and irrecoverable’.

Secondly, the scope of Critical Illness is very narrow. It usually refers to the typical 30 Dread Diseases found in most insurance policies, with slight variation from company to company.

Pls do not mistaken me as saying that our life insurance plans are not useful. On the contrary, they are very, very important! Their existence is there to ensure that if you or your loved ones, unfortunately faced with such a crisis, the money payout would be far more precious that you can imagine to be.

The application of a Disability Income Insurance is to compliment your existing life insurance as an additional safety net for your wealth protection planning. A DII cover is different from the usual TPD in the sense that it does not require disability to be permanent or total.

Features of DII:

• After a waiting period of 60~180days (depending on T&C of the policies), a monthly payout would be given to the insured if he/she is incapable of going to work, as diagnosed by the doctor.
• As the name implied, it is meant to provide you with an income in the event of partial disability, up to 75% of your existing income
• Expiry date can be extended up to age 55, 60, or 65

e.g. Mr X is a salaryman whose monthly income is $4,000. One day, he is being knocked down by a car, and unable to go to work for many months due to whatever medical reasons, e.g. loss of one leg, severe backpain, partial paralysed, etc. Under the definition of TPD, he would be UNABLE to claim anything from his life policies, but what he can claim is from his Personal Accident Plan, and also the Disability Income Insurance Plan.

Assuming he is insured under a 75% DII plan, he is entitled to $3,000/mth ($4k x 75%) up to the day he is able to go back to work. And in this case, if he lose his original job after his 'recovery', and has to take up a lower salary job of $2,000, he would be able to claim another 75% of the difference ($4k - 2k) = $1,500/mth. In other words, his total income would be: $2,000 + $1,500 = $3,500/mth.

Don't you think it's advisable to equip yourself with the right instruments so that financially, you are prepared for any major crisis that may strike you unknowingly?

From my dealings with my clients, many are unaware how much they are insured, and how much risks they are absorbing on themselves. Do not take chances where you cannot afford to lose. Just look at how many accidents on the road, and how many patients at the hospitals.

Target market: Anyone!
The doctor/specialist who need his nimble hands to operate on his patients, the engineer who is in risk of handling big machines, or even a clerk who need to type report, etc. Can you imagine not being able to work and not getting an income while you are partially disabled?

Do contact me if you wish to find out more on this Disability Income Insurance. I have one. Do you?