Disability insurance: lowdown on long-term insurance

Disability insurance provides cover for anyone faced with wage loss through disability. Here we give the lowdown on this type of insurance.

How long does it last?
A disability insurance policy will normally provide cover for a year.

How is it obtained?
This cover can be obtained by individuals, or by a group of employees. Individuals can arrange their insurance directly from an insurance broker, based on medical underwriting. Groups will be insured by an employer, association or professional group.

Individual policies are available provided you haven’t had any medical treatment during the past 10 years for any condition that was potentially disabling. Medical treatment also refers to prescription medication and consultations with medical experts.

What is medical underwriting?
This is a review of your how insurable you are based on your medical history. Your medical records will be referred to determine your eligibility for disability insurance. This may include health checks which might lead to coverage being denied, or if a particular pre-existing condition can be covered.

Who can receive group coverage?
In order to participate in long-term insurance, each individual must have worked for a certain period of time, known as a ‘service wait’. Similar conditions apply for group or association-affiliated coverage.

What income replacement is available?
Disabiity insurance provides a monthly income replacement based on either a percentage of gross pre-disability earnings, or a specified amount. There are variations to these alternatives – the policy will give full details of the relevant conditions relating to the cover provided.