Understanding disability cover in insurance 

Disability is a physical or mental condition that limits a person’s movements, actions or senses. Nearly 10-30% of the road accident or any other accidental hospitalization leads to some form of disabilities. There is a health insurance policy to cover the medical expenses of a person in case of hospitalization and life insurance to provide compensation to the family of the deceased, but what if the person is disabled and unable to carry out his/her regular work? This is where the disability insurance or the personal accident policy comes into picture.

Personal Accident or disability insurance compensates the insured in case of accidental disability and the nominee in case of accidental death of the insured. Disability insurance can be offered as a standalone policy as well as an add-on in life insurance policies. Disability or personal accident insurance is an indemnity based insurance where the payout is independent of the incurred losses.

• Death: Accidental death of an insured customer during the policy period is covered under the disability insurance policy. The nominee of the insured would be compensated in case of death of the policyholder due to any accidental means.

The death of the policy holder results in claim settlement and cancellation of the personal Accident policy. The accidental death can be due to any unforeseen circumstance covered under the terms and conditions of the policy.

• Permanent Total disability: The personal accident policy covers the disability of the insured which is total and permanent in nature caused due to accidental means. For example loss of two limbs, eyes due to any unforeseen consequence is considered as permanent total Disability. The disability is total and permanent in nature with no chance of recovery even after a period of time.

The compensation under this section would be paid to the insured customer and the amount of compensation would be dependent on the policy terms and conditions.

• Permanent Partial disability: The disability insurance policy covers the disability of the policyholder that is permanent but partial in nature and the disability is caused due to any accidental means. For example the loss of one limb or one eye due to any unforeseen circumstance is known as permanent Partial disability. The disability is permanent but partial in nature.

The compensation paid to the policyholder under this section would depend on the terms and conditions of the policy.

• Temporary total disability: The personal accident policy covers the disability of the policyholder that is temporary and total in nature where the disability is due to any accidental means. For instance the breakage of the hands is considered a temporary total disability where the disability is total and temporary in nature.

Under the temporary total disability the insured customer would be paid an allowance for a certain number of weeks such as a percentage of the sum insured for a maximum of 104 weeks. Since the policyholder would not be able to engage in daily work life due to the temporary total disability a percentage of sum insured would be paid weekly to support the customer.

• Temporary partial disability: Temporary partial disability is a condition where the policyholder would be disabled partial and temporarily in nature. The temporary Partial disability includes the fracture of fingers where the disability is temporary and partial in nature.