Liberty Disability Cover Review 2023

The Liberty Disability Cover is an insurance product that pays the primary insured a lump sum of up to R3 […]

Liberty Disability Cover

The Liberty Disability Cover is an insurance product that pays the primary insured a lump sum of up to R3 million if he or she becomes disabled. The Liberty disability cover has a minimum cover amount of R1 million.

The Liberty disability cover premiums start from R126.00 for the lowest cover with the lowest risk factors and rise as the cover amount increases and/or the risk factors increase.

Individuals between the ages of 18 and 65 can purchase the product. Individuals over the age of 65 are not eligible for Liberty disability coverage.

The Liberty Disability Coverage protects you against illness or injury that renders you permanently disabled. The person covered by the plan must be unable to earn an income due to a disability to make a valid claim.

Individuals can choose to be covered for their nominated occupation or for any occupation that matches their education, training, and work experience.

If the policyholder becomes disabled, the disability benefit can be increased to pay out a lump sum. Any illness or injury that causes a permanent loss of bodily function but does not affect one’s ability to work is considered an impairment.

What is covered by Liberty disability insurance is discussed below.

About Liberty Disability Cover

The Liberty Disability policy covers capital disability and impairments. As follows, we will look at the two benefits that come with Liberty disability insurance.

Capital Disability

If the policyholder becomes occupationally disabled, capital disability pays a lump sum that is tax-free to the policyholder. This benefit is payable if the policyholder is unable to perform their specific job or any reasonable job taking into account education, training, and work experience.

This coverage is available for the policyholder’s entire life, but it can only be purchased before the age of 65. When you purchase the policy, you are automatically covered for your own occupation disability.

The product allows the policyholder to choose an annual cover increase. The product can also include a 10.5% automatic premium increase on the policy’s anniversary. The increase in premiums will result in an increase in the cover amount while also beating the current South African inflation rate of 7.7% to keep its value.

When you purchase the policy, the premiums you pay will be determined by the underwriting risk factors. Age, gender, occupation, rating category, occupation category, and smoker status will be rating factors for the coverage.

Impairments

If the policyholder becomes permanently impaired, the Impairments benefit pays a tax-free lump sum. The amount of the payment will be determined by the severity of the policyholder’s impairment.

This coverage is for the policyholder’s entire life and does not expire. This policy, however, is not available to anyone over the age of 64. Physical impairments are covered immediately and do not have a waiting period under this policy.

The policy cover can be adjusted to keep up with the rising cost of living in South Africa. Policy increases are limited to 10.5%, which is good enough to help the coverage keep up with inflation.

When the policy is purchased, the premiums are determined by the policyholder’s age, gender, rating category, occupation category, and smoking status. Premiums will be lower for those who are younger and healthier, as well as those who work in white-collar jobs.

Liberty Disability Cover Limitations

The policyholder is subject to some limitations, which are determined by whether the insured member becomes disabled within 5 years of reaching the age of 65.

If the policyholder becomes disabled with less than one year remaining on the plan, Liberty disability insurance pays out 16.67%. If the member has been insured for more than a year but less than two years, he or she is entitled to 33.33% of the cover amount.

Members who have been insured for more than two years but less than three years are entitled to 50% of the cover in the event of disability. Individuals who have had the policy for more than three years but less than four years and become disabled receive a payout of 66.67%.

Those with at least 4 years of coverage but less than 5 years on the policy are covered for 83.33% of the total payout upon disability claim. When filing a disability claim, policyholders with 5 or more years of coverage receive 100% of the cover amount.

The payout on the Liberty disability cover is tax-free regardless of the percentage claim of the benefit. The money made available will not be taxed and can be used however the policyholder sees fit.

Advantages of Liberty Disability Cover

  • The premiums for the Liberty disability cover are very competitive.
  • The cover can be bought online without the need to visit a Liberty branch.
  • The maximum cover amount is able to cover most disabilities and can help a person to have a better quality of life when living with a disability.
  • The cover can be purchased online.
  • There are many benefits that the policyholder can enjoy.
  • The payout amount when claiming is tax-free.
  • Both permanent disability and impairments are covered.
  • Cover increases are available to keep up with the increasing cost of living.

Disadvantages of Liberty Disability Cover

  • There is no cashback benefit for the policyholder, meaning they don’t get some of their premiums back if they remain claim-free.
  • There are no added benefits, such as premium waiver, which are essential for a disability cover.

Conclusion

The Liberty Disability Cover policy provides the insured member with an insurance product that can cover disabilities and impairments. Furthermore, the policy provides adequate coverage to assist individuals in coping with a disability. However, the policy lacks add-ons, making it difficult for those who want to optimize their coverage to do so.