Disability Insurance Coverage, Benefits, Exclusions

Disability insurance is also known as personal accident insurance provides disability income to the policyholder in the event of disability specified under the policy terms and conditions. Disability due to accidents can occur at any time and the income earning capacity of an individual might take a hit due to the accidents. To compensate the policyholder in the event of disability, disability insurance is introduced.

Ensuring one’s ability to earn a livelihood is of utmost importance. Accidental disability insurance can render anyone temporarily or permanently disabled. Disability insurance or personal accident insurance is offered to people having income earning capacity and the premium is calculated on the basis of sum insured and the nature of work in which the policyholder is involved.

What does Disability Insurance Cover?

In India the disability insurance is not offered as a stand-alone product, it is offered as a personal accident product that covers the accidental death and disability of the insured. The coverage in a personal accident or disability insurance is explained below.

• Accidental Death: In case of accidental death of the policyholder, the maximum of the capital sum insured is paid to the nominee of the policyholder. The policy stands canceled after the payment of the claim amount. The claim amount is paid as a lump sum to the nominee in the event of the accidental death of the policyholder.
• Accidental Disability: Disability that is accidental in nature is covered under the disability insurance policy in India. The table of contents is mentioned below”:-

• Permanent Total Disability: Disability that is permanent in nature and irreversible is called a permanent total disability. For example, loss of both the limbs, eyes, etc is classified as permanent total disability as the body loses the ability to re-grow the organs. 100% of the capital sum insured is paid to the policyholder in case of permanent total disability.
• Permanent Partial Disability: Disability that is temporary & irreversible in nature is called a permanent partial disability. For example, the loss of one limb or one eye comes under permanent partial disability. The disability is partial and is permanent i.e. human body cannot re-grow the organs. Claim amount of 1% to 50% of the capital sum insured is paid to the insured in case of permanent partial disability cover.
• Temporary Total Disability: Disability that is temporary in nature and prevents the insured from performing his regular duties for a limited period of time is called temporary total disability. For example, a fracture of two limbs renders a person from performing his regular duties. A claim amount of 1% of the Capital Sum insured is paid weekly for 104 weeks.

Benefits under Disability Insurance in India:

There are certain benefits under disability insurance India:-

• The claim amount provided to the insured in case of disability can be used for rehabilitation.
• In case of temporary total disability weekly benefits will be provided to the insured.
• High coverage with less amount of premium in case of disability insurance.
• Accident insurance policy comparison with a life insurance policy covers accidental death and partial disabilities, not covers death from illness or disease and death from a drug overdose.

Exclusions under Disability Insurance:

• War and other allied perils are not covered under the disability insurance policy.
• Participation in any kind of speed testing (using motor vehicles for bike or car race).
• The act of terrorism is not covered under disability insurance.
• Involving in any kind of dangerous activities such as paragliding etc are not covered under the disability insurance.

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