There is some confusion between Disability Income (DI) insurance and insurance coverage that provides a payout for Total & Permanent Disability (TPD). Despite already writing a post introducing DI insurance before, I believe that more clarification is good to clear the air regarding such a policy that few people, including industry practitioners, are aware of.
TPD coverage is a lot more commonly explained as it is found in many insurance policies. DI insurance, on the other hand, is a very specific type of policy which coverage is markedly different from TPD but often conflated to be the same as they both seem to cover “disability”.
Disability Income Insurance (DII) is a very specific type of policy with the intended purpose of insuring one’s ability to work. Much like the Aesopian goose, most Singaporeans produce their own “golden eggs” in form of the monthly salaries they receive for working. DII steps in to replace the lost monthly income when a person is unable to work due to accident or illness.
Income replacement is possibly one of the top most priority for working class Singaporeans after a hospitalisation plan, and many insurance policies are sold on this premise. However, as cliché as the proverbial goose analogy is in the world of insurance sales, many agents are not recommending DII policies, pitching life coverage in form of Critical Illness and Total & Permanent Disability as income replacement solutions instead. Let’s take a look at what DII does and why so many Singaporeans are under-insured in this regard.