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How to compare Partial Disability benefits for Income Protection Insurance

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By Andrew Clark

Most Income Insurance policies include cover for partial disablement - i.e. your capacity to do some of the duties of your occupation, but not all ... or, in the case of an income- based disability definition, your ability to earn some, buit not all of your income.

The policy wordings of these income protection benefits vary enormously and you should take great care to compare these.

The chicken or the egg?

A critical flaw in many policies on the market is that their definition of partial disablement starts with words like "Following a period of total disability of no less than ...". In other words, these policies are only designed to pay a partial disablement benefit for a period AFTER you have sustained a disability that satisfies their definition of total disablement.

This is a flaw because of 2 important facts.

Firstly, a large proportion of illnesses are slow onset - at least in terms of their impact on your income- earning capacity or your capacity to perform your duties.

Secondly, the majority of long-term income protection insurance claims are for illness, not injury.

Some examples would include MS or other slow-onset diseases, one of the most common being degenerative disorders like degenerative disk disease in the spine.

The 'modern day' illnesses like depression, chronic fatigue - even cancer, do not necessarily render someone entirely incapacitated overnight.

So if you are serious about affording yourself good cover, you should seek out a policy that pays out partial disability benefits without first having to have been totally disabled otherwise the partial benefit is not much more than a rehabilitation benefit.

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