Disability cover and personal accident insurance give you a way to protect yourself financially in the unfortunate event of you not being able to work due to serious injury, accident or illness.
While most of us will reach retirement age, there will be some who won't. An untimely death, disability or severe illness can have severe financial consequences for a family. Accident insurance and disability cover are there to minimise the financial impact of such tragedies.
Types of disability cover
There are two forms of disability cover: lump sum cover and monthly income protection.
Selecting the right disability cover product for you will depend on personal circumstances. As a general rule of thumb though, income protection cover is preferable as there is more likelihood of a payout in the event of sickness or a partial or short-term disability. The lump-sum cover is appropriate if you have a particularly high-risk job or hobby that is associated with major disabilities.
Why you need accident insurance and disability cover
Many of us with regular employment take it for granted that the disability cover attached to our group life assurance will be sufficient to meet all our financial needs, should we become disabled. Unfortunately, the truth is that this type of assurance will do no more than meet the costs of your most basic necessities.
Formal accident insurance is far more appropriate should you have a higher-risk lifestyle.
Make sure you protect yourself financially
To fully receive all the benefits of formal accident insurance, and enjoy peace of mind, you need to protect yourself financially from worst-case scenarios.
It is, for instance, absolutely vital that you fully disclose your medical history when applying for accident insurance. You don’t want to run the risk of your claim being refused due to non-disclosure. Insurance companies only get one chance to assess the risk of insuring someone for many years into the future, and it is only fair that they have access to all relevant medical information to arrive at their decision.
The cost of accident insurance and disability cover
Monthly premiums for your disability cover are based on your risk profile – that is the probability of you becoming disabled, and the level of cover you would require if you did. Important here is assessing exactly how healthy you are. As a result, the life assurance company may require you to have a medical examination.
Your premiums will also depend on several other factors, such as:
- Your age.
- Your personal habits. You will, for example, pay more if you smoke or drink heavily.
- The nature of your job and hobbies. High-risk jobs and adrenaline-seeking pastimes will mean that you will need to pay more.
- The level of disability cover you want. Whether, for example, you want to be assured against not being able to perform your particular job or any other job.
