Payment of the benefit will normally be made monthly in arrears, commencing on the 1st of the month following the end of the deferred period.
Benefits may increase by an indexed rate (such as RPI), a fixed percentage or by a certain percentage chosen by you at the start of the policy.
The definition of incapacity will be different from policy to policy. This will depend on your choice at the application stage. The options may be limited by your occupation.
Incapacity will be defined as meaning being unable to follow:
- your own occupation;
- any occupation in which you are trained or experienced;
- any occupation at all; or
- being unable to undertake a number of Activities of daily work or Activities of daily living.
Incapacity will be defined on one of the following bases:
- Own occupation – the policyholder is incapacitated if they are unable, following illness or accident to perform their own occupation and are not working in another job.
- Suited occupation – the policyholder is incapacitated if they are unable, following illness or accident to perform an occupation suitable to them given their education and training.
- Any occupation - the policyholder is incapacitated if they are unable, following illness or accident to perform any occupation at all.
- Activities of daily work – the policyholder is incapacitated if they are unable, following illness or accident to perform a number of defined activities associated with work. The policy will define the number of activities and their definitions.
- Activities of daily living (ADLs) - the policyholder is incapacitated if they are unable, following illness or accident to perform a number of defined activities such as dressing and undressing, washing, eating, climbing stairs, shopping, cooking and so on. The policy will define the number of activities and their definitions.
Rehabilitation benefit may be payable as a monthly income when you return to work, in either the original occupation or a new one, and you have a reduced income within 6 months of the return to work. The benefit is a proportion of the full benefit that was paid. For example, if 60% of the original income is being paid, 40% of the full benefit would be payable as the rehabilitation benefit. The rehabilitation benefit will end on death, expiry of the policy, a return to pre-incapacity earnings or after a pre-set period as defined in the policy.
An exclusion may be applied at the start of the policy whereby benefit payments will not be made if the incapacity is as a result of, or related to the exclusion. Blanket exclusions, such as breach of the law, self-inflicted injury or being under the influence of alcohol may also be applied to the policy.
Some policy providers will require that you let them know if you change your occupation as there may be a change to the amount of premium or the length of the deferred period for the new occupation.
Policies may apply different definitions at different times in your life. You should check your terms and conditions to see what applies to you or contact your policy provider.