Some illnesses or accidents cause long term disability, from which recovery may seem remote. It is however possible to insure against a loss of income resulting from being unable to work with a long term disability income protection plan.
Long term disability income protection pays a monthly benefit until you reached the end of a pre-selected term. This is often retirement age. The maximum benefit is a proportion of your pre-disability income, usually 50% – 60%.
There are a number of definitions of being unable to work through disability. It could mean you cannot do your original job, which might be due to the job being quite specialised, or it could mean you cannot do any job, in which case you would have to be very poorly. To claim, you would need to be signed off by your GP.
If your disability means you could do a lower paid job to which you are suited through training and education etc, then a ‘suited occupation’ definition could apply. The insurance may pay you a proportionate benefit related to your reduction in earnings. If you found that at some point you could return to work, then the benefit would stop. However you would be able to claim later if you suffered a relapse or a new illness.
How much does it cost?
The monthly cost of disability income protection schemes is based on a number of factors:
- Your age. Older people tend to have more illnesses and so pay more.
- Health issues. If you have existing health problems you may pay more.
- Employment. Some jobs are more risky and so likely to contribute to illness, such as very physical occupations and those working at heights, so expect to pay more. Surprisingly, Teachers are a higher risk due to stress related illnesses.
- Lifestyle and hobbies. Smokers pay more, as do those with riskier hobbies such as motor bike racing, private flying, mountaineering etc.
- Waiting (or ‘deferred’) period for claims to be paid. The longer you can go without benefits, the lower the premiums. This is because the insurance company will not have to pay out for short term illnesses.
Why do you need it?
If you rely on state benefits to support you through long term disability then the illness may be even more life changing than it needs to be. Disability income protection might at least help you and your family to maintain much of the lifestyle you enjoyed before the illness and should form part of your overall protection planning.
You can see more about specific protection products here
To enquire about the range of cover available, and see how it could benefit you, contact Robert Drury using the ‘Contact me’ form below.
THE PLAN WILL HAVE NO CASH IN VALUE AT ANY TIME AND WILL CEASE AT THE END OF THE TERM. IF PREMIUMS ARE NOT MAINTAINED, THEN COVER WILL LAPSE.