Being unable to work due to sickness and injury can put you into so much stress, especially if you are the lone breadwinner in the family. That is why, it’s highly necessary that you include income protection on your financial planning steps.
However, it’s not enough that you get any kind of coverage at that as not all policies are the same. In some cases, you may not be allowed to work due to injuries or sickness, and you won’t have any choice but to rely on the benefits payment (which is a reduced amount of your income) that you are entitled of.
Want to get back on track fast after suffering an injury or sickness? Then here’s the solution to your woes—the 10 hours disability definition.
What is this product about?
The “10 hours disability” that is defined in your policy would mean that you are considered severely disabled if and only if:
- You are incapable to perform any income producing duties of your usual occupation for more than 10 hours in a week
- You are not working beyond 10 hours in a week in any gainful occupation but you do follow your doctor’s orders with regards to the injury or sickness.
Take note, however, that this definition won’t apply to those who have been unemployed for one year or more before the disability started.
How will clients benefit from this?
For some clients, getting back to work as soon as possible in spite of their sickness or injuries is very important because their business or their key duties in the company could not be handled by any substitute. So if you’re among them, here’s a summary of the advantages you’ll get from 10 hours disability definition:
- You will be allowed to work in spite of your sickness and injuries and will still be eligible to receive the monthly benefit amount from your policy.
- You won’t be stressed thinking how your business is running because this will give you the opportunity to oversee its operations for 10 hours a week.
- The income that you’ll earn from working 10 hours per week will not be offset against your monthly benefit payment.
- Claim processing is fast once your doctor’s recommendation is received. If you can work less than 10 hours a week, that will be treated as severely disabled. But if you can work more than 10 hours per week, that will be considered partially disabled.
How does this work?
Here’s a sample case to give you a clear picture as to how this product works:
James Anderson, a 37-year old who runs a plumbing business, had his income protected in the event of sickness or injury by purchasing a policy.
While doing plumbing works one day, he accidentally injured his back when he tried to lift some pipes. His doctor then recommended that he is unfit to work any technical duties in connection with his plumbing business. This is where the complication begins.
James, just like any other business owner, wanted to oversee the operation of his business while he’s recuperating. But with his doctor’s advice, he could not do so. And so, this was where the 10 hours disability definition came into play.
Good thing, James included the 10 hours definition on his policy. Because of this, he was allowed to work for up to 10 hours a week. His tasks were mainly delegation, decision-making, organization, and overseeing business operation, while his 2 employed plumbers do the technical stuff.
Under the 10 hours disability definition, James would be receiving an extra $750 per month as compared to the partial disability benefit.
Here’s a sample computation of his earnings:
Pre-disability income = $4,666/month
Earnings from working 10 hours/week = $1,000
Insured monthly benefit = $3,500
Under 10 hours definition:
(Insured monthly benefit) $3,500 + (Monthly earnings from 10hours/per week work) $1,000 = $4,500
Under partial disability:
(Pre-disability income) $4,666 – (Monthly earnings from 10hours/week work) $1,000 /
(Pre-disability income) $4,666 X (Insured monthly benefit) $3,500 = (Partial disability benefit) $2,750 + $1,000 = $3,750
Did you notice the $750 difference between the two? Clients will sure benefit from this product—not only will you be able to receive the extra amount computed above but you will also be able to oversee your business without losing your insured monthly benefit.
Make sure when you apply for your income protection policy you ask for a 10 hour defintion.