Disability of any kind takes a toll on one, not just emotionally, but financially as well. To help cope with expenses and loss of income, one could consider taking a disability cover.

What is it?

You can get a disability cover to deal with permanent disabilities (both total and partial) as well as temporary disabilities.

In case of an accident that leads to a disability, you will receive payments to cover not just actual expenses but also loss of income on account of not being able to work.

Disability cover is a benefit policy — this means it works together with others, such as medical, life and accident insurance as well as the disability policies taken by your employer.

There is no restriction on the number of covers that one can avail of or on the total sum assured.

 The policy has no waiting period and no medical tests are needed for enrolment, says MS Sreedhar, MD and CEO, Royal Sundaram Alliance Insurance. Claims made have to be settled within 30 days according to regulatory norms.

What is covered?

The most basic versions cover accidental death and permanent total disability due to accident. The premium cost for this basic cover can be about ₹125 per year for ₹1 lakh sum insured.

In case you are disabled fully and permanently, you will receive the full sum insured. Some products offer double the accidental death sum insured, in such a case. If the disability is partial, which means you are able to perform some functions, the policy will pay a percentage of the sum insured, depending on the degree of disability, says Sanjay Datta, Chief Underwriting and Claims, ICICI Lombard General Insurance.

If the disability is for a short term, you would be paid a weekly benefit to compensate for loss of income up to a maximum period specified in the policy, if you have taken the add-on cover.

Disability that is not due to an accident and requires hospitalisation is covered by indemnity health insurance policies, says M Ravichandran, President – Insurance, Tata AIG General Insurance. That said, indemnity health insurance policies will cover only actual expenses incurred. You cannot claim under multiple policies, but must choose which policy to claim from.

There may also be limits on the compensation payable towards weekly income less what is received from other sources, says Anand Roy, Senior Vice-President at Star Health Insurance.

Add-on covers

You can also opt for various add-ons to the basic policy. For instance, a temporary total disablement cover can get you weekly payments for a specified number of weeks. The premium for this add-on (for ₹1 lakh ) would be around ₹75.

Others pay for charges, such as ambulance, funeral and repatriation of remains. For a sum assured of ₹1 lakh, you may have to pay ₹50-150 per option. One other add-on you may want to consider is a child education benefit. This helps pay for the child’s education in case of accidental death of the parent.

Selecting a policy

There are a few points to consider before you sign up for a policy. One, the sum insured should be based on the income that may be lost. Insurers have their own guidelines on how your sum insured is linked to your earnings.

Ideally, you must cover for up to eight times your present annual income, suggests Sreedhar. Be sure to declare your income correctly at the time of purchasing the policy, as you have to prove it at the time of claim.

Two, while piecemeal coverage may be cheaper, comprehensive covers may suit your purpose better. It is important to compare the degree and types of permanent disabilities that are covered across products and opt for the widest coverage, says Ravichandran.

Three, policies differ in the degrees of disability that they cover and the percentage of sum insured they pay.

In case of partial disability, the percentage you get paid depends on what is stated in the policy document. So, pay attention to the clauses. You must also ask for the claims settlement history of the insurer.