Disability Cover under Term Insurance: A Brief Overview
Rizvi was working with a multinational company in Dubai. He was the only earning member in the family and had purchased a term policy in order to provide financial security to his family in his absence.
He also had a health insurance plan for meeting the contingencies related to health. He had taken a loan while buying his house.
His life was a smooth ride until the day he met with a car accident while coming back from work. He suffered from serious injuries on both his arms. Consequently, he could not work anymore. His flow of income had stopped but the flow of financial responsibilities and medical bills speeded up.
Although he had bought one of the best term insurance plans, it came of no use in that situation. What went wrong? Wasn’t term insurance sufficient? What should have been different such that Rizvi was covered in such a situation?
The answer to your question is the insurance rider. If Rizvi had a Disability cover, things would have been different.
As they say, it is important to learn from your mistakes; however, sometimes we should simply learn from mistakes made by others. So that you do not repeat Rizvi’s mistakes, keep reading ahead.
What is Disability Cover?
This insurance rider for term insurance in UAE pays out in case of the death of the policyholder or if he suffers serious injuries in an accident, like a car crash.
The payout for the injuries is limited to those cases where the insured suffers from permanent or total disability. This coverage is basically a replacement for a part of your income lost when you become unable to work as a result of injury or sickness.
If the insured meets with an accident that causes disability or even worse death, the insurer offers payments covering not only the expenses incurred but also the loss of income. This may help to fulfill the financial liabilities as well as maintain the present lifestyle of the insured and his family.
What is Covered Under this Rider?
The basic version of this rider involves permanent and temporary total disability as a result of an accident. If the insured person becomes permanently and fully disabled, the insurance company will pay the entire amount. In case they suffer a partial disability, the provider will pay a certain percentage of the covered amount based on the degree of disability.
How to Choose the Disability Cover?
Here is a short list of things to consider while going for a disability cover on your term insurance in UAE.
Comparing Policies Against Disability Covered
Comparing the types and degrees of permanent disabilities, which is covered across different products is very important. Ultimately, you need to look for the widest coverage. Though comprehensive cover is more expensive, it will prove to be more effective as opposed to a limited disability cover.
Selecting the Right Cover Amount
Age and income level is the main factor while determining the sum assured. You must analyze your requirements and choose the cover amount accordingly. Choosing the right amount of coverage means selecting will ensure a financially peaceful lifestyle for you and your loved ones even when your income has dried up.
Reading the Terms & Conditions
Policies may differ based on the intensity of disability covered and the portion of sum insured paid. In the case of partial disability, the amount you will receive is dependent on what is written in the document of the policy. Hence, it is very important to go through the fine print.
The Final Words!
The accidents do not come knocking on your door. They just barge into your lives without prior notice of course. The disability cover will help the policyholders in case they injure themselves seriously in case of an accident, where term insurance plans alone are not sufficient.