There are different types of assurance products that cover you if you become disabled. You need to know the differences in order to make an informed choice and buy the best cover suited to your circumstances.

Hollard Life’s head of product and technical business, Ryan Chegwidden, says: “There’s no question that it makes sense to take cover against the risk of being unable to provide financially for ourselves and our families. But, thanks to insurance jargon, there’s confusion about the benefits between disability policies and impairment policies.”

Chegwidden says insurers define a “disability” as an injury or illness that results in you being unable to earn an income from doing your job. An “impairment” is an injury or illness that results in a physical or functional disorder – your job is irrelevant.

“Both can be equally serious and life-changing, and the effects may be either temporary or permanent, but the difference lies in the extent to which they compromise your ability to perform your workplace responsibilities.

“Say a computer programmer loses his sight because of an accident or illness. His condition will prevent him from doing his job, and he will be unable to earn an income as a computer programmer, so that would meet the criteria for a ‘disability’. The loss of sight would also meet the criteria for an ‘impairment’.

“However, if the same programmer loses the use of his leg because of, say, a car accident, although the injury is profound, he would still be able to do his job, because no physical agility is required to sit in front of a computer. So, in that case, while the programmer would be ‘impaired’ by his injury, his capacity to continue to earn an income from his existing job means that this would not be classified as a ‘disability’.”

On the other hand, he says, if the programmer suffered from a mental condition, it is possible that this would not meet the criteria for an “impairment”, but it could be considered a “disability”.

You may want a comprehensive product that covers both disability and impairment, Chegwidden says. However, you may not be able to afford the premiums. 

Furthermore, a pre-existing health condition or a dangerous occupation may disqualify you from disability cover. This is where impairment cover – which is not based on occupation and a pre-existing health condition may be an acceptable risk – may be sufficient.

“Based on these two core offerings, there are income protection products for every circumstance,” Chegwidden says. “It’s a question of finding the one that meets your unique requirements.”