Nowadays, we all need to take care to protect ourselves and our families from as many dangers as we can. One danger that is difficult to avoid but easy to cover is that of disability. By disability, we mean incapacity for work as a result of an accident or illness. Certainly, no one can avoid the risk of an accident or an illness that will make him incapable of work. With Disability Insurance (Total or Partial) the insured can feel safe, at least financially, to be able to cope with the new facts.
In this given situation, as a result, we have an increase of stress which worsens the situation. In case that someone works as a freelancer, will not be able to replace his income if he gets himself in this situation. Also, in the case of a head of household, whose family and children are mainly supported by his income, the situation becomes more difficult.
What is Permanent Total Disability?
Permanent Total Disability is defined as the total lack of ability to practice a profession, due to an Accident or Illness, for which the insured has the appropriate qualifications to practice due to education, training, and experience. This situation must last without interruption, for a continuous period of time (at least 6 months) and will prevent the insured from re-engaging in this profession.
Total Permanent Disability coverage, as mentioned before, can be due to either an Accident or an Illness, depending on the wishes of the insured. Once the Permanent Total / Partial Disability of the insured is certified, the amount of coverage agreed upon under the contract is paid. The amount of coverage of Permanent Total Disability is at the choice and according to the needs of the insured.
Permanent Partial Disability
In addition, the case of permanent Partial Disability can be covered as well. That is, in the event that the insured due to accident or illness becomes incapable of work partly and not in full. In this case, the insured receives from the insurance company a percentage of the amount he has set as the insured value. The table with the percentages of Permanent Partial Disability is written in the insurance policy of the insured.
Moreover, the Permanent Total and Partial Disability insurance can be a stand alone contract or it can be combined with other coverages. For example, it can be combined with hospital care, life insurance, private pension, etc.
The premium of Permanent Total and/or Partial Disability insurance is calculated according to:
- The capital desired by the insured
- The frequency of payment of premiums
- The profession of the insured
- The age of the insured
- The health history of the insured
Loss of Income
Income Loss Insurance is an insurance coverage in which the insured is financially covered in case he is found unable to work due to illness or accident. This coverage can be for up to 2 years. Income Loss Insurance can be either an additional cover or a standalone contract and replaces the insured’s monthly income.
With Loss of Income Insurance, the insured secures an amount, which he sets, in order to cover expenses such as:
- Debts, loans, bills
- Family expenses
- Household expenses
- Recovery costs
- Personal expenses
If someone becomes temporarily disable to work due to an illness or an accident, he loses income from his work. He may have a loan or a debt which he will have to repay but will not be able to. In addition, he will have his daily running expenses. For example food, basic needs, but also household expenses, such as electricity bills, water bills, or even rent. Finally, the loss of income insurance can cover the costs of medical care of the insured at home, medicines, and other costs that may arise.
Additionally, if the insured has family and children, they are also affected. The assured will not be able to cover the expenses of his family, nor to contribute to the expenses of the education of his children.
The questions that someone has to consider are:
- If I get sick or have an accident and I can not work for a while, how will I pay my expenses?
- Who will pay for my children’s education?
- How will I replace my income?
If someone does not have a plan to solve all these questions above, Loss of Income Insurance is the best solution to carry all this potential risk.
Loss of Income Insurance is mainly aimed at freelancers. Freelancers in case of inability to work due to an accident or illness, will find themselves in financial difficulty.
Income loss coverage can be activated from the 7th day – the 15th – after the first month – or even 3 months after an accident or illness to the insured. The period of monthly compensation can be up to two years and can be extended up to five depending on the insurance company chosen by the insured.
Profesco – Lloyds
The Profesco program, provided through Lloyds, is an ideal combination to cover both Permanent Disability and Income Loss with limits that can exceed € 1,000,000.
The Personal Accident contracts of the Insurance market in defining the concept Permanent Total Disability, where the insured is compensated with 100% of the capital, stipulate that the insured must prove he is permanently incapable of any work. On the contrary, Profesco defines as Permanent Total Disability the accidental event and/or unforeseen illness that will make the insured incapable in the future to practice the specific main occupation or other occupation that was originally declared and described in the Insurance Contract.
Moreover, the difference of the Profesco program compared to any other program of permanent Permanence Disability coverage is that the insured does not have to go through a state disability certification body. Instead, the certification can be made by an arbitrator appointed by the insurance company in conjunction with a colleague of the insured who practices the same profession. These two people must be accepted by both the insurance company and the insured. The arbitrator and his colleague will certify that the insured, due to illness or accident is not able to practice the profession he practiced and not any other profession.
Profesco is mainly addressed to freelancers such as:
- Artists (eg Painters, Musicians, Singers, Actors, etc.)
- Civil Engineers
- Pilots/flying staff etc.