THE MOST IMPORTANT THING
WE HAVE IS OUR HEALTH.

What is disability insurance, and why is it important?

Disability insurance provides financial protection by replacing a portion of your income if an illness or accident prevents you from working. Unlike public insurance programs, which often provide limited coverage, private disability insurance ensures compensation tailored to your needs and lifestyle. It serves as a crucial safety net to prevent financial difficulties in the event of a prolonged inability to earn income.

What is the difference between disability insurance and critical illness insurance?

While both types of insurance protect your financial stability in case of health issues, they differ significantly:

• Disability insurance: Provides a monthly income replacement if you are unable to work due to illness or injury.
• Critical illness insurance: Pays a one-time, lump-sum benefit upon the diagnosis of a serious illness (such as cancer, stroke, or heart attack), helping cover medical expenses, loan repayments, or necessary home adjustments.

Ideally, these insurance policies complement each other for maximum protection.

Why should I get critical illness insurance if I am healthy?

It’s crucial to purchase critical illness insurance **before** developing a medical condition. Insurance companies often deny coverage to individuals with pre-existing serious illnesses. Additionally, premiums are usually lower when you enroll while young and in good health. Critical illness insurance allows you to prepare for unexpected situations and maintain financial stability despite a temporary or permanent disability caused by a severe illness.

How do benefit payments work for these types of insurance?

• Disability insurance: Paid in monthly installments and continues as long as you are unable to work, up to the age limit specified in your policy.
• Critical illness insurance: Provides a **one-time lump sum**, which is tax-free and can be used as needed without justification.

Each type of insurance offers distinct advantages tailored to different situations.

Does disability insurance cover all illnesses and accidents?

No. Disability insurance policies clearly define what is covered. Some common exclusions include:

• Disabilities resulting from suicide attempts or self-inflicted injuries.
• Injuries sustained voluntarily.
• Disabilities occurring during illegal activities or high-risk hobbies (e.g., extreme sports).
• Pre-existing medical conditions, which may affect eligibility for benefits.

It’s crucial to thoroughly review the terms of your policy and consult an insurance advisor to ensure you have adequate coverage.

Do I need disability insurance if my employer already provides coverage?

Employer-provided disability insurance is a good starting point, but it is often limited. Reasons to consider individual disability insurance include:

• Your coverage may end if you change or lose your job.
• Employer group insurance benefits may not be sufficient to maintain your standard of living.
• Individual insurance allows you to customize coverage with appropriate benefits and waiting periods.

Having personal coverage ensures continuous and customized protection, regardless of your employment status.

How do I determine the right coverage amount for me?

The ideal coverage amount depends on several factors:

• Your current monthly expenses (rent, mortgage, bills, groceries, etc.).
• Your financial commitments (loan repayments, children's education, etc.).
• Your lifestyle and spending habits.

It is generally recommended to choose a coverage amount that replaces **at least 60% to 80% of your gross income** to maintain financial stability in case of disability.

What are the main eligibility criteria for disability or critical illness insurance?

Eligibility requirements vary by insurer but typically include:

• Age (younger applicants receive better premium rates).
• Overall health condition (a medical evaluation may be required).
• Occupation (high-risk jobs may lead to higher premiums).
• Desired coverage level and medical history.

Enrolling early helps avoid increased costs and ensures comprehensive protection.

Are there any tax benefits for disability or critical illness insurance?

Yes! In many countries, disability insurance premiums may be tax-deductible if obtained through an employer or a tax-advantageous plan. However, benefits received are often taxable.

For critical illness insurance, the payout is typically tax-free, allowing beneficiaries to use the funds freely according to their needs.

What happens if I can no longer afford my insurance premiums?

The consequences depend on the policy:

• Some policies offer a **grace period**, allowing you to catch up on missed payments.
• If the policy lapses, obtaining new coverage with the same terms may be difficult, especially if your health condition has changed.
• If your policy has a **cash value**, you may receive a portion of the premiums you’ve paid.

If you are facing financial difficulties, contacting your insurer to explore options for maintaining your coverage is highly recommended.