Disability insurance

Disability insurance might be one of the most important plan for the working people.

It is basically a plan that will give you a payout in the event of disability. The payout it self can be monthly or lump sum depending on the plan.

3 types of working disability definitions:

- Any occupation = Benefit will be paid out in the event the insured is unable to perform any occupation and earning any income for indefinite time to come.

-Suited occupation = Benefit will be paid out in the event the insured is unable to perform the suited occupation, which is the occupation based on the past experience, education or training (usually based on what the insured do for past 5 years).

-Own occupation = Benefit will be paid out in the event the insured is unable to perform the current occupation.

To claim under "own occupation" is the easiest whereby under "any occupation" is the hardest.

So what about those people who are not working? For them, it will be based on "Activities of Daily Living (ADL)". If they are unable perform usually 2 or 3 from the 6 ADL, then the benefit will be paid out. 

The 6 ADL are transferring, mobility, feeding, washing, toileting and dressing.

Of course if someone lose their limbs (E.g. 2 arms, 2 legs, 2 eyes, combinations), this will be instantly considered as total permanent disability.

Is this a plan that you should consider?

For single: Yes.

For married couple: Yes for both.

For family with children: Yes for both.

For retiree: No, as disability plan usually ends at age 65.


Some of the plans that are available in the market:

1. Normal total permanent disability plan.

2. Comprehensive disability income plan.

Tips: Aim for at least 10 times of your annual income for your disability coverage.