Disability (income protection) insurance

[simon43]

There are regular discussions on Thaivisa about the best medical health insurance policy to take out.  But I don't see any discussions about income protection insurance, should one be employed and fall ill or have a serious accident.

 

I'm aged 58 and intend to work until I'm maybe 65 or 67 in the job that I enjoy.  I am able to save the majority of my salary to provide a modest income when I retire.  But these plans would be scuppered if I were to have a long-term illness or accident that would prevent me from earning my salary.

 

What I need is an income protection policy that will pay out a % of my usual salary, (typically 80% I understand), after a wait period of say 6 months.

 

Many companies offer these types of policy.  But as with medical insurance, I think that the conditions and premiums vary from company to company.

 

Does anyone have experience or knowledge of a recommended income protection policy/company?

[canopus1969]

Not stand alone but I know AA Insurance Brokers (sponsors) offer this with as a rider to a medical policy if that helps

[simon43]

An update to my post:

 

I contacted AA brokers, who were unable to help.  The policy that they (and all the other insurance agents promote), is from William Russell.  The cover is great, but I'm too old!  They will only provide income protection insurance if this is taken out before one reaches the grand old age of 55 years.

 

This makes me think - are those in the 55-65 age group such a high risk that insurers won't even offer an income protection policy?

 

I searched and Googled high and low, and couldn't find any company other than WR who offered an income protection policy for expats.

 

Anyone know of a company that offers such a policy as a standalone (ie not as a rider to their medical insurance policy?).

[DGS1244]

I think you find that no Thai Insurer offers this type of cover especially to foreigners. The few foreign insurance companies that are represented here all have age and location restrictions and the chance of finding one that can is extremely remote.

[Aussieroaming]

I've got disability/income protection with Aetna in Kazakhstan, (they have taken over BUPA Thailand), though mine is a company plan and and all employees have coverage regardless of age. Not sure if this helps but some info.

[simon43]

Thanks - I did find some company plans, but no personal income protection plans.  I remember when I was younger that there were many companies offering this type of plan.

 

I'll keep looking...

[StevieAus]

I hate to be negative but believe that you will have an uphill if not impossible battle

The problem is that disability/ income protection insurance is for obvious reasons high risk and the older you are more of a risk

I was a Director of an Industry Superannuation ( pension) Fund in Australia and the only way we could achieve it for the membership without many being excluded was to make it an opt out option therefore spreading the risk 

I had tried obtaining such insurance when I was in my mid forties without any health issues and my doctor balked at filling out the paperwork such was the detail required

I really believe that your only option is to try and find some other way of saving money as a form of protection for when you have a problem

[simon43]

To update on this:

 

I completed the detailed application form for long-term disability insurance cover from a company called Expatriate Group. 

 

This policy would provide me with a monthly payment of 70% of my gross salary, with a deferred period of 26 weeks, should I be unable to work, and this policy is renewable annually until I reach statutory retirement age.

 

Presumably, the annual premium will increase each year as well.....

 

The premium quoted for the first year of this policy was $1,973 USD,  to provide a maximum annual benefit of $24,360 USD.

 

My medical application details showed that I am in very good health, with no pre-existing conditions, and therefore with little reason to be unable to work, unless due to a serious accident or illness.

 

So the annual premium is about 5% of my annual salary.

 

Is this good value or 'par for the course' for this type of insurance policy?  Sounds expensive to me.

 

The premium is about twice the premium that I pay to Healthcare International for my $500,000 USD medical insurance policy.

 

I wonder if there is a different type of policy that would pay out a lump sum, if I were unable to work due to serious accident or illness.

 

 

 

[stevenl]

Back in the day when I used to market insurance we also had disability insurance. I seem to recall, but don't hold me on that, that the premium was about 3% for somebody in your profession. 26 weeks. At your age with retirement coming up relatively soon anyway (so not many years of pay-out possible) sounds like an expensive deal to me.

[Aussieroaming]

Why not put your money into a term deposit and cash out only if you need it? Some of the term deposits in the west are pretty reasonable and your net return shouldn't exceed the taxable threshold. 

[simon43]

Why not put your money into a term deposit and cash out only if you need it? Some of the term deposits in the west are pretty reasonable and your net return shouldn't exceed the taxable threshold. 

 

I already save about $2,000 each month in Thai ETFs, which give a reasonable return and are relatively low risk.

 

The whole point of income protection is to (partially) replace that $2,000, should I be unable to work and earn my salary. So that I can continue to save my 'salary' for when I retire.

 

The insurance premium quoted is about 8% of the income to be covered.

 

The company has confirmed to be that the premium is calculated pro-rata against my salary.  So if I only want cover for say 40% of my salary, then I can do so at the 8% rate.  This would at least provide some income, should I be totally incapacitated.

 

Still, I think 8% is high....

[impulse]

Just out of curiosity, what age will the payments end if you become ill?  Thailand's got a statutory retirement age of 60.  If you were to become disabled at age 40, I can see having a policy that would pay out until you're 60.  But at age 58, it hardly seems worthwhile to have a policy that only pays out a year or two.  Especially at 8%.

 

That's based on my recollection of past (employer provided) disability policies that paid out until the statutory retirement ages dictated by Social Security.  After that, they expected SS to kick in.

 

You may want to work through 65-67, but the payments only go as long as the fine print specifies.  I could easily see an insurance company pulling a fast one by calling out the Thai retirement age.

 

[stevenl]

3 hours ago, impulse said:

Just out of curiosity, what age will the payments end if you become ill?  Thailand's got a statutory retirement age of 60.  If you were to become disabled at age 40, I can see having a policy that would pay out until you're 60.  But at age 58, it hardly seems worthwhile to have a policy that only pays out a year or two.  Especially at 8%.

 

That's based on my recollection of past (employer provided) disability policies that paid out until the statutory retirement ages dictated by Social Security.  After that, they expected SS to kick in.

 

You may want to work through 65-67, but the payments only go as long as the fine print specifies.  I could easily see an insurance company pulling a fast one by calling out the Thai retirement age.

 

Agree, that is what I referred to as well.

[simon43]

Just out of curiosity, what age will the payments end if you become ill?  

 

Yes, I specifically checked up on this and got the reply in writing.  Since the company is based in the UK, they will pay up to my 65th birthday.  I did point out to them that according to the latest information from the UK, my statutory retirement age was now 66 years, but they re-confirmed that they would pay out to 65.

 

The retirement age in Thailand wasn't relevant - I currently work in Myanmar anyway...

 

I also asked about if they would pay out if I went self-employed.  Yes they would, but I'd have to substantiate my income if I made a claim. I asked this because the opportunity to teach online raises its head more often than before, and the income is not far off what I earn 'in-class'.