Temporary incapacity is a condition that limits, even if only for a period of time, the continuity of the work that a person has been doing. There are specific situations and conditions that characterize this state, as well as rules for the appropriate classification.
These are formal requirements, since they may authorize compensation to the insured in this condition. Although there is a similar situation addressed by Social Security, in this post we analyze a possibility of this coverage when taking out life insurance.
Continue reading and find out if life insurance covers temporary disability.
What is temporary disability?
Temporary incapacity is the state of affairs to which an insured may be thrown by an accident or illness. In such a state of affairs, days lost from work lead to losses at times quite severe, particularly to professionals whose income is measured according to production.
In this case, life insurance can offer coverage known by the same name that pays compensation to cover the days off work. Compensation, therefore, is due when the individual is unable to continue his or her normal occupational activity.
Payment will always be for the days in which the insured is in that situation, stopped, that is, unable to work normally. For this reason, we speak of daily payments for the insured, proportional to their normal earnings.
The concept given by the Superintendence of Private Insurance (SUSEP) for this case is “Daily Payments for Temporary Disability” (DIT), guaranteeing compensation in the following terms:
So, does life insurance cover temporary disability?
Life insurance , in addition to the advantages it offers, has a wide range of possible coverage options, always aimed at providing support in different anticipated conditions. This is important, since its nature is to guarantee support for the various situations to which each person may be susceptible.
In general, life insurance offers coverage for various situations, such as:
- death;
- disability due to accident;
- serious illnesses ( pre-existing illnesses must be declared );
- temporary incapacity;
- funeral assistance.
Thus, in the hiring process, the interested party ( company or individual ), knowing their own needs, chooses the coverage that best applies to their reality. Here, your insurance broker will be a great partner, bringing you the best options on the market.
In all cases, your policy must reflect these previously provided possibilities. Among the different coverages for which life insurance guarantees compensation, there is the one already mentioned above: the Daily Temporary Disability Benefit (DIT).
In this way, the insured person who finds himself temporarily unable to work will be covered with an amount corresponding to his/her earnings, compensated through the payment of daily allowances. All amounts must be specified in the insurance policy , whose beneficiary is the insured person.
Keep in mind that most, if not all, of your household bills can be covered without having to use up your financial reserves for a few months. This is particularly important coverage for freelancers or self-employed professionals whose income directly depends on their employment.
Main health situations covered by the coverage
There are several situations that may be included in the coverage for temporary disability, that is, causes responsible for the limitation imposed on the insured. Among others, the following health occurrences stand out, as well as those resulting from personal accidents:
- work-related musculoskeletal disorders, known by the acronym DORT;
- repetitive strain injury, whose acronym is RSI;
- cumulative trauma injury or TBI;
- events resulting from accidents;
- various health disorders that are not classified as “serious illnesses”.
What is the daily allowance for temporary disability and how does it work?
DIT, as you have seen, consists of the payment of daily work allowances to the insured in a situation of temporary impediment to their professional activities. In turn, the condition of temporary incapacity can result from two situations: the incidence of an illness or the occurrence of a personal accident (outside the work environment).
In this case, the reason for a person’s absence may, for example, have been an accident that requires them to stop working for a period of three or four months. This period will be covered by the insurance through the payment of the respective daily allowances.
In order to include this coverage in the life insurance contract, the interested party must prove his/her income, and it may be necessary to do so again when claiming compensation. This proof can be provided by presenting an income tax return, pay stub or bank statements from the last three months.
There is a requirement from SUSEP that determines a minimum age limit of 16 years and a maximum of 65 years to purchase this coverage. In addition, different insurers may have different requirements, such as the maximum number of daily allowances, deductible, waiting period and excluded risks.
What is not included in temporary disability coverage?
It is important to know that absences caused by certain situations such as those listed below are not covered by this modality. In this sense, the following cases are excluded:
- pregnancy, abortion and their effects;
- known and unreported congenital anomalies;
- hernias resulting from diseases;
- clinical or surgical treatments for aesthetic reasons;
- obesity treatments;
- mental illness or disorder;
- progressive diseases.
At the same time, as there is specific coverage for the incidence of serious illnesses, these illnesses are also not included in the list of temporary disability coverage. Important examples that can be cited, among others:
- Cancer;
- heart attack;
- stroke;
- renal failure.
As you can see, temporary incapacity is a condition in which a person is temporarily unable to continue their work activities. In these cases, there is life insurance coverage that can be taken out to guarantee compensation, in the form of daily work allowances, during the absence.