What is commonly known as “disability insurance”, is sometimes referred to as ‘Health and Accident Coverage’, and is a policy which has been designed to pay out a percentage of an employees present wages should they become unable to work. The two major reasons for the claiming of disability insurance benefits, are accidents (if at work or not) and debilitating sicknesses.
Workers in Australia, who are covered under disability insurance policies must demonstrate that they cannot carry out their current duties in order to qualify for total disability status when making a Total and Permanent Disability claim.
- Insurance professionals recommend that customers do some research before taking out a disability insurance policy.
- The cheapest policies can also work out to be the most restrictive with regards to eligibility and monthly payouts.
Respective insurance firms can make their own terms, so keep an eye out for certain things such as a meaningful income percentage payout (45% to 60% is normal), a 90 day or less waiting period for benefit eligibility, and hardly any restrictions on alternative work options.
- A lot of workers wish to feel useful by pursuing jobs not affected by the disability, but there are some disability insurance policies which fervently discourage such a practice.
Own Occupation Coverage
A number of Australian insurance companies consider the ideal disability policy to be what is known as ‘own occupation’ coverage. With this kind of plan, disabled employees can keep on earning some income via other jobs whilst still collecting benefits from the policy.
- And while this might benefit the policy holder, insurance companies usually promote other plans first.
Another disability insurance policy pays out a percentage of any lost income as long as the insured worker acknowledges to only consider any future employment in his or her present field. Probably the worst type of disability insurance requires for any disabled workers to look for any available work, and that includes low paying work minus any benefits.
Returning to Employment
One more element of disability insurance includes returning to work after any sickness or accident. An employer might be able to resume nearly all of their duties, but still suffer from a loss of income and time. This will lead to a claim known as ‘residual disability’.
A residual disability insurance policy continues to pay a percentage of the insured employee’s income until he or she is once again working at the exact same level prior to the illness or accident.
- A number of cheaper insurance policies do not provide and residual disability coverage or only pay out for lost time.
Ensuring the Best Coverage
Along with various other insurance plans, making use of disability insurance coverage provides more sense than not having any. A lot of group insurance policies can provide assistance for any emergency types of treatment or short-term health care, but not many safeguard employees from any long-term effects of a disability or debilitating sickness.