What is disability insurance?
Disability insurance pays out a tax-free lump sum of up to R10 million if you are permanently disabled by accident or illness, depending on the type and amount of cover bought. Monthly premiums are based on your specific risk profile, taking factors like age, gender, occupation and health into account. Your policy pay-out can be used to cover living expenses, pay off debt and customise your car or home to cater for your disability. With a disability cover policy you know that you and your family are financially protected against permanent disability and you have the funds you need to continue providing for your family as well as adapting to your disability.
What is covered by disability insurance policies?
Disability insurance can cover various types of disabilities, including losing a limb, complete loss of sight or hearing, permanent confinement, major burns, or head trauma. With 1Life Disability Insurance, you can choose either Occupation-based Disablement (also known as Lump Sum Disablement) which pays out the full amount if you are totally and permanently disabled and can't work, or Event-based Disablement which covers certain events, as detailed in your policy schedule, and pays out a percentage of your cover.
Occupation-based disability benefit
Occupation-based Disablement pays out a lump sum if the policyholder becomes totally and permanently disabled and can't perform their regular job or any other job based on their education, training, and experience. The maximum benefit stays the same until 5 years before the policyholder reaches 65 or their chosen retirement age (whichever comes first). After that, the maximum benefit decreases yearly by a fifth. The policy pay-out depends on factors like age, health, and type of work.
Event-based disability benefit
Another type of disability cover is the Event-based Disablement benefit, which pays a percentage of the sum assured according to specific criteria described in the policy schedule. Any claim paid out reduces the amount available for future claims, and once a cumulative amount of 100% of the total sum assured has been paid out, no further pay-outs for this benefit will be considered and the cover will cease.
For example, a policyholder takes out R500 000 Event-based Disablement cover. The policyholder loses a limb in an accident. Per the policy book, the policy pays out 50% of the sum assured for the loss of a limb and the policyholder gets a R250 000 pay-out. The remaining R250 000 is available for future claims.
Increasing your disability cover
With 1Life's Disability Insurance, policyholders have the option to increase their cover by 25% every three years*, up to a maximum of twice the original amount or the maximum insurable amount offered by 1Life Insurance, whichever is lower. This can be done on the policy anniversary date or after a significant life event, such as marriage, birth or adoption of a child, purchase of a home, or entering into a business. No further underwriting is required, other than a new negative HIV test.
Disability Policy Exclusions
There are some conditions under which claims may be rejected, including participation in dangerous sports, self-inflicted injury or illness and excessive alcohol consumption. These exclusions are outlined in the policy schedule. Avoid rejected claims and review the exclusions in your policy schedule. Note that specific exclusions may also apply to your cover based on your medical history, for example if prior to applying for a policy you had back surgery due to a disc prolapse, claims relating to the back, neck and spine may be excluded. Refer to your policy schedule for any specific exclusions that may apply.
Why 1Life Disability Insurance?
Choose 1Life Disability Insurance for fixed premiums for 12 months and no waiting periods for accidental disablement. Get covered with just one call and no paperwork or medicals required. For further peace of mind be sure to talk to our consultants about buying 1Life Dread Disease Cover to protect against serious illness like cancer, strokes or organ failure.
Note: You may only use this benefit if you:
- Have not claimed and are not in the process of claiming
- Are not aware of any condition present and have not suffered any event that would entitle you to claim under a policy
- Request the increase within 3 (three) months of the date of the significant event or policy anniversary
- Are younger than the maximum entry age for this benefit
The views and opinions expressed in this article are those of the authors and do not necessarily represent or reflect the views of 1Life Insurance or its employees.