What is disability insurance?

What is disability insurance?
disability insurance

Disability insurance brings some different coverage for you who want complete protection against accidents. Learn more about the modality!

infinite situations can cause accidents or discover an illness and change the course of our lives, and to prepare ourselves financially, it is essential to have disability insurance.

These coverages allow you and your family to have support against unforeseen events, including the possibility of receiving compensation in life.

With this, it is possible to plan the next steps safely, without compromising your reserve budget or worrying about possible debts arising from a permanent condition.

On the other hand, not all people know the characteristics that differ these from other products. In that case, to hire complete protection, it is essential to understand types of disability insurance and how they work.

And to help you, we have gathered this and other information in a special content, with the main clauses that involve this contract and what security you will have in case of an accident. Check out!

What is disability insurance?

Disability insurance is a form of financial protection in cases of accidents or illnesses, according to the coverage contracted, that compromise or nullify the capacity, or cause the loss of a member, sense (vision or hearing) or organ of the insured person.

However, it is important not to confuse private disability insurance with INSS disability retirement. In the latter, the disability is of a functional nature, that is, it necessarily compromises the exercise of the profession by the taxpayer.

It is essential to pay attention to the nature of coverage for acquired disability, as it can be partial or total and have specifications as to the cause of the disability, such as:

  • disability by accident;
  • work disability due to illness;
  • functional disability due to illness.

There are other crucial details to take care of before taking out disability insurance, see below the types and functioning of each of the main disability coverages.

How important is disability insurance coverage?

Having disability insurance is important to ensure adequate compensation if you lose your functional capacity and are prevented from carrying out your activities.

Accidents or illnesses can be critical, and compromise not only their organs and limbs, but also their autonomy. This affects all of your planning, in addition to disabling your daily and work activities.

In other words, you may not be able to work and provide the income your family needs to survive.

This situation can be worrying, and take the comfort of the people you love. In that case, disability insurance can support you through difficult times until you get back on your feet.

In addition, as it is a payment that can happen in life, the holder also has the possibility of paying for treatments and possible expenses related to his new condition.

What are the main types of disability insurance covers?

Before taking out disability insurance, it is worth knowing the main types of conditions related to these coverages. This way, you can confirm that it is a modality aligned with your profile. See the most common toppings on the market:

Total disability due to accident

Disability insurance provides coverage for total and permanent loss of a limb, sense or organ, in the case of accidents covered by the product. In this case, the insured person or beneficiary receives the full amount of compensation in situations such as the total loss of vision in one eye, for example, or a leg.

This is the main condition covered by this type of policy , as it compromises, in a more effective way, the autonomy and physical capacity of the insured person.

It is worth emphasizing that total permanent disability due to an accident is one without the possibility of recovery, where the organ or member is fully compromised.

Partial disability due to accident

On the other hand, in the case of a product that has partial permanent disability coverage, if the degree of disability was not complete, but showed considerable results, the insured person is entitled to compensation for partial impairment in cases of accidents covered by the product.

Payment takes place according to the affected body part and the percentage agreed with the insurer, defined in the general conditions of the product, to meet the holder’s need according to his injuries.

For example, if in an accident the insured has found the partial loss of one of the feet, this constitutes partial disability, and may be covered by the policy, with partial payment of the contracted capital.

This extension can serve other limbs or body parts, according to the conditions of the product sold by the Insurer.

Major accident disability

It is also important to note whether or not disability coverage is increased. That is, if it is not increased, for the insured to receive 100% of the indemnity it is necessary to lose both hands or feet, otherwise it may be subject to a percentage payment according to a table.

In coverage with an increased condition, the total payment of the indemnity is made for some conditions that would be considered partial in other contracts.

Labor disability due to illness

Total permanent occupational disability insurance due to illness is not the most common coverage of policies , but it can be a protection that the insured person hires.

In practice, it is the possibility of receiving compensation in the case of illnesses that cannot be expected to be recovered or rehabilitated, for the main work activity of the insured person. This protection is more common in collective insurance contracts offered by the company.

Disability due to illness

Another insurance coverage is total permanent functional disability due to illness, which is protection as a result of illness that causes the loss of the insured person’s independent existence, that is, his autonomy.

However, this product does not replace insurance for the diagnosis of serious illnesses, it is just an additional extension of the contract to address specific sequelae.

How does disability insurance work?

Disability insurance works in a similar way to life insurance, but the coverage is different, and it’s also why you receive your compensation payment.

Disability insurance coverage can be partial or total. In the case of partial disability coverage, a percentage of the total amount of coverage is defined according to the degree of loss, reduction or functional impotence of a member or body of the insured person.

In most Insurers, disability insurance can only be taken out together with life insurance. It’s an old custom in the insurance market in Brazil: treating life insurance as a big package.

But today, you can avoid that. Azoz insurance is the insurance for your life, you can take out the coverage you want individually, without paying for coverage you don’t need.

In addition, traditional insurers may consider that to be fully disabled it is necessary for the insured to lose the limb completely. That is, if the accident causes part of the hand to be lost, it is not considered a loss.

It is now possible to find increased total permanent disability coverage. As a result, the insured is compensated 100% for some situations traditionally considered partial, for example: the loss of sight in one of the eyes, the loss of one of the feet or one of the big toes (up to the pastern).

Necessary documents

After requesting the claim notice, the claim adjustment process begins. Have the policy, personal documents and medical evaluation at hand, it is essential to prove the accident occurred and the medical condition of the insured person.

Also make sure that the insurance you are going to take out does not exclude the total loss of coverage capacity. For example, in Azoz insurance we take into account that if you lose the complete movement of a hand, even if you have not lost the limb, its functionality is compromised, which is why it is included.

What is the difference between total and partial disability insurance?

Disability insurance can be partial or total, depending on the degree of loss, reduction or impotence suffered by the insured person.

In the case of partial disability, the insured receives a fraction of the indemnity depending on the severity of the damage suffered by the policyholder, in accordance with the pre-defined schedule set out in the General Conditions of the insurer.

Total disability insurance, on the other hand, covers the loss or total impotence of a limb or organ. In these circumstances, the insured receives the full amount of compensation. Being subject to not receiving percentages in partial loss of limbs and phalanges.

What is not covered by disability insurance?

Disability insurance has some exceptions to coverage, and it is equally important to know about them before taking out your policy.

Here are some of the conditions that are not covered and why you should be aware:

war operations

The accident condition or other type of injury that leads to disability can be caused by war situations, for example. It is a rare condition in Brazil, but this possibility exists.

Because of this, insurers make it clear that there is no coverage for this type of condition, and the holder who is involved in a war operation and is permanently injured will not be entitled to payment.

The same goes for civil operations that cause unintentional accidents, such as injuries or victims of the situation, for example. Even in these cases, the policy is not valid.

Pre-existing conditions not reported on adherence

Furthermore, it is essential to emphasize that disability insurance is under no obligation to cover the effects of pre-existing illnesses or accidents not reported when subscribing to the policy.

During the analysis of the holder’s profile, the insurer requests information about his medical history and any health problems that already exist.

Dependent on my Health Insurance Plan Who Can Be Added

This data is essential, as it interferes with the customer’s evaluation and even with the composition of your product, such as the insured capital and the premium. Therefore, it is essential to be transparent at this time.

However, if the insured does not report any precondition and suffers a condition of disability due to illness, for example, the insurer may appeal if it finds that this was the case.

This situation is even classified as fraud, and the holder not only may lose the compensation, but also have his life insurance canceled without any support.

Therefore, it is important to pay attention to all the information that you provide during your analysis, in order to have valid protection that will serve you in unforeseen times, without running the risk of not being covered.

When is it worth taking out life insurance with disability coverage?

It is worth taking out disability, illness or accident insurance when you feel that your moment in life requires this type of protection.

Many people rely on a routine that presents more risks to their physical integrity, and they want to protect themselves against fatal situations that compromise their mobility and autonomy.

In addition, you may also be looking for more complete security to offer your loved ones, covering any unforeseen possibility that compromises your planning, including an illness.

In that case, disability insurance can offer more coverage and bring peace of mind to your everyday life, knowing that you are also protected against accidents and permanent conditions.

So, before deciding whether this coverage can suit you, assess your current life situation and see if this modality makes sense for you.

And to make sure you’ve found the ideal life insurance, do a free simulation and learn all the details of your policy!


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