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DISABILITY INSURANCE

A person’s greatest asset is their ability to work and earn an income. Suffering long-term sickness or injury will prevent you earning an income, financially crippling you and your loved ones and making you dependent upon others.

Facts to consider with disability insurance:
People insure their assets, such as their cars      and houses, but their biggest asset – their      income an potential to earn an income are not      always insured.
Many people are just surviving on their      income. How will they survive without it?
More homes are lost through disability then      through death.

Disability insurance claims are paid in lump sum payments, in differing percentages, according to the type of policy and the nature of the claim.

What is classified as disability?
For years, disability assurance has been a problem child. Traditionally, disability assurance has been based on your ability to do or not do a job, with three classifications.
Being able to do your own job;
Being able to do your job or a similar job (which is how most policies operated and still do operate)
Being able to do any job (if you were the group managing director and had a stroke but could still make tea      for the office, you became the tea maker at the tea maker’s salary – an exaggeration maybe, but this is the      principle).

This resulted in all sorts of disputes with rejected disability claims being the main cause of complaints to the Ombudsman for Life Assurance. This system has also been a major area of fraud perpetrated by policyholders.

New age insurance policies do not provide traditional disability cover based on being able to do a job or not. It bases its approach on whether you have an impairment, such as the loss of a limb, or a poor medical condition, such as failing kidneys; and/or whether you are capable of undertaking daily living tasks, such as being able to feed yourself.

Obviously this new way of judging disability has increased a person’s chances of claiming. Unfortunately too many people have not updated their older polices and have a risk of not being able to claim.

Disability benefits either decrease the life cover, or are have no effect on the amount of life insurance if a claim is made.

Disability insurance is usually attached to a life insurance policy, but under new generation policies, can be brought separately.

Disability and extreme insurance
When issuing disability cover there are 3 options available to the insurance companies:

1. Normal Premiums
This means that the premiums will not be affected by the sports participated in.

2. Loaded Premium
The insurer will take on the risk, but at a higher cost for the perceived higher risk.

3. Exclusions
This insurance company will not pay claims that results from extreme sports.

It is generally very difficult for extreme sportsmen to get cover for disability and majority of insurance polices that are held by extreme athletes have exclusions for disabilities as a result of their activities.

To make sure that your current policies have no exclusions, or to get information on disability products that cover extreme sports, please contact Extreme Insurance.


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