AIA recently launched their AIA Premier Disability Cover plan, a plan that provides protection in the event a person is unable to work due to illness or injury.
This type of plan is what we call a disability income type of plan.
A disability income plan provides a monthly income benefit as long as you are unable to perform the material duties of your work after a two or three months waiting period. You might be more familiar with the normal type of insurance which provides a lump sum benefit in the event of death or total and permanent disability (TPD).
A disability income plan seeks to plug the gap before TPD occurs as it provides protection even if the disability is partial or temporary. It is a kind of term plan with no savings component so the premiums can be quite affordable. As the plan is heavily related to occupation, premiums will vary by occupation class.
A typical disability income plan will provide a monthly payout for up to 24 months if you are unable to perform the material duties of your own occupation. The payout will then continue (up to a certain age) as long as you are unable to perform any occupation for which you are reasonably suited by reason of your training, experience or training.
With the launch of this plan, there are now three disability income plans in the market, with the other two plans being offered by GE and Aviva. I hope to see more insurers offering this type of plan as more competition can only be good for consumers. Already, I can see distinct differences between the offerings of the three companies.