Total and Permanent Disability (TPD)
- This usually appears as an add-on to traditional life insurance, and is an advancement of the Death payout;
- Some definitions defined TPD as Loss of use of both or a combination of the following: eyes, or limb at or above the ankle or wrist;
- Coverage terminates upon age 65;
- Must be disabled for at least a period of 6 months to qualify for payout.
Disability Income Insurance
- Defined by inability to perform your job role, and subsequently inability to perform any job role that you are suitably trained, educated or have experience in doing;
- As a result of a change in job or inability to take on the same role, the insured could experience an impact to earned income. Some insurers will pay an income benefit if current pay is less than 75% of your previous income;
- Usually deferred period of 3-6months before the first payout
Personal Accident Insurance
- Must be an accident in nature, defined by an event that is unforeseen, sudden, and unexpected, causing bodily injury. This outrightly excludes disability caused by illness or disease.
- Some insurers will pay out a percentage of the disability benefits accordingly. For example, partial disability/loss of use of body functions like loss of speech, loss of use of fingers, third-degree burns could lead to payouts.
- Eligible for Singaporeans, age 40 and above.
- Pays out a monthly income upon 3 ADLs, of $400/month up to 6 years.
- Premiums can be paid out of Medisave.
I hope that the above has widely clarified the differences between disability insurance policies. If you have any questions as to which may be most suited for your lifestyle, feel free to reach out for an exploratory discussion.
Disclaimer: The views expressed here are solely those of the author in his private capacity and not necessarily to the author’s employer, organization, committee, or other group or individual.