What is International Group Permanent Disability Insurance?
This cover is also generally purchased alongside an International Group Life Insurance scheme and consists of two types of cover:
- Permanent and Total Disability
- Permanent and Partial Disability
‘International Permanent and Total Disability’ can be taken on its own. However, ‘Permanent and Partial Disability’ is not available as a standalone policy – it must be taken with the other.
Both policies cover disability of either accident or illness and the benefit is paid as a lump sum in both cases. The lump sum can be set as either a specified amount or as a percentage of the employee’s gross salary. For example, if the employee earns £30,000/year and you purchase coverage for 2x salary, they will be due an insurance payout of £60,000, should the worst occur.
Why would a business choose International Group Permanent Disability Insurance?
Permanent Disability has a significant impact on an employee’s life, and that of their loved one. This can occur via either accident or illness, so the coverage for both via International Group Permanent Disability is useful and separates it from International Group Accidental Death and International Group Accidental Dismemberment.
It is the only International Group Disability Insurance which would pay a lump sum to an employee if they became disabled via an illness. The others (International Group Income Protection / International Short and Long Term Disability) pay a monthly salary percentage. This alone may not be enough if significant life changes are needed around the time of incident, which can be expensive.
How does International Group Permanent Disability Insurance work?
Both ‘Permanent and Total Disability’ and ‘Permanent and Partial Disability’ provide cover as the result of an accident or illness if the employee is both:
- Unable to perform the duties of their own occupation
- Unable to perform any suited occupation based on their education skills and experience)
This is provided that the ‘Permanent and Total’ / ‘Partial Disablement’ is definitive and irreversible, and that the employee has suffered a significant loss of income. Significant is defined as 33.33% or more for ‘Permanent and Partial Disability’ and 66.67% for ‘Permanent and Total Disability’.
If a ‘Permanent and Partial Disability’ claim is followed by a separate ‘Permanent and Total Disability’ claim, then it will be reduced by the amount already paid out.
Permanent Disability is assessed on:
- The functional or physical disability of the employee
- The occupational disability of the employee
Assessed degree of Permanent Disability:
- Less than 33.33% – No benefit due
- Between 33.33% and 66.67% – ‘Permanent and Partial Disability’ only – the amount of disability allowance will be calculated as the rate of disability multiplied by the sum insured.
- Over 66.67% – ‘Permanent and Total Disability’ – if the degree of disability exceeds 66.67% then it is considered a permanent and total disability. In this case 100% of the sum assured is paid.
Where Permanent Disability is selected in addition to Short-Term Disability cover, any cover eligible for Permanent Disability will be paid after the Short-Term Disability cover finishes.