Taking out a life insurance policy gives the insured the peace of mind that their loved ones will have financial support at the time of their death. That is to say, when death occurs, the heirs or the persons stipulated by the contracting party receive the corresponding amount.
In addition to death, many life insurance policies provide that the insured may receive this indemnity in the event of disability or incapacity. It is precisely on this point that we are going to focus in this article: What degree of disability is recognized in each life insurance policy? Can I choose it?
Disability in life insurance
More and more people are taking out a policy of this type in order to meet the costs that a total or absolute permanent disability could entail.
Social Security recognizes permanent disability when the person presents serious anatomical or functional reductions, foreseeably definitive, that diminish or annul his or her capacity to work.
In other words, it is possible to obtain the life insurance indemnity in the event of an accident or illness that will no longer allow you to live:
- Work in your usual occupation (total incapacity for your usual occupation).
- Work in any profession or trade (absolute permanent disability).
And this is where the “fine print” comes in: when we take out a life insurance policy, we usually have ABSOLUTE disability coverage. What does this mean? In the event of an illness or accident, you will only receive compensation if you are no longer able to work at all. In other words, if you have to retire from the world of work.
Taking out a life insurance policy: Professional or absolute disability?
What is the problem? Insurance indemnities are based on the incapacities stipulated by the National Institute of Social Security (INSS), linked to a pension. At the moment, the agency is recognizing more professional incapacities (you can perform other jobs) than absolute incapacities (you can no longer work at all).
In this situation, it is important to study well the disability coverage in our life insurance. Would absolute coverage be enough or is it better to extend it to professional coverage?
That is precisely what we do at PIB Group Iberia: to advise you and put on the table all the conditions of each of the insurance policies so that you can take out the policy that suits your needs. Here you can learn more about our life insurance and contact our team, who will inform you of the possibilities that exist with this insurance that, as we have seen, can also cover disability.
Types of disability to be taken into account when purchasing insurance
Now that we know that it is necessary to read the conditions of the life insurance policy very well before taking it out, let’s take a closer look at the degrees or types of permanent disability as a consequence of an accident or illness that are of interest to us when taking out the insurance policy:
Total permanent disability
It disqualifies the worker from his or her usual profession, but he or she may engage in a different one. After suffering an accident or due to illness, the person cannot continue to work in his or her occupation, but can work in other sectors.
For example, a doctor who has been granted total permanent disability can work as a teacher.
In such a situation, the insured would only collect the life insurance if total permanent disability (also called professional disability) is contemplated. If, as happens by default in many life insurance policies, what has been contracted is coverage for absolute permanent disability, in this case nothing would be charged.
Absolute permanent disability
The recognition of absolute permanent disability disqualifies the worker from any profession or trade. The person cannot return to work, so life insurance coverage can be an important aid in coping with this new situation.
Which disability rating should I choose for my insurance?
As you can see, to answer this question it is necessary to have all the information and, above all, to study the conditions of the coverage. You choose to what extent you want to be protected, since you can cover only death or extend it to permanent disability (and, in this case, to professional or absolute disability).
The coverage of permanent total (or professional) disability is an insurance solution that we are already offering at PIB Group Iberia and for which professionals such as doctors, lawyers, architects… and many other workers who prefer to cover this risk are increasingly interested. Whichever modality you choose, we will make sure that your policy not only fits your budget, but also that you are clear about the guarantees of one or the other.
Can we help you with your life insurance? Contact our team and we will be happy to assist you.
