Disability Insurance Plans: A Cover By The State


Disability insurance plans are the schemes developed by the public services of most of the welfare countries to arrange for income protection of their employees and have been greatly successful in providing security to their public employees.

As designed by the administration it is a system which automatically covers all the employees working under the public sector of the respective state and their insurance premiums are annually deducted from their salaries. This is applicable when they are on paid leave as well. All full-time and part-time employees are covered under this policy until there are employees who have come on a contract for a specific time or are under apprenticeship.

The policy expires when the employee is terminated by the administration or sustains an injury or illness or retires. In that case under the evidence and information provided about the nature of inability, the employee is granted a monthly insurance benefit of supplementing his income. One should keep in mind that this insurance policy is a scheme to provide a replacement to your income and is not meant to cover expenses of your illness.

Under the disability insurance plan every insurer must be under the care of a licensed physician. Plus, the person would receive cover only after his official sick leave is expended. The insurance also looks at the rise of living cost and increases allowance to the maximum of 2%.

A disability insurance plan can be short term or long term, depending upon the income, the rate of premium, the state of illness or the health history of the insurer. A disability insurance plan has an eliminating period based on its term and till that period it continues to supplement your income during your disability on a monthly tax-free basis.