According to a recent study by Massey University, disability is the biggest area of underinsurance for families in New Zealand. In case you didn’t know, disability insurance insures the policyholder’s income against the risk of encountering a disability that makes it hard for them to perform the core functions of their job. So, what’s causing people to avoid investing in such a necessary tool?

Why Disability Coverage is Avoided

The main reason behind most people not investing in disability cover is the way the insurers present the policy. Most insurers put disability cover at the bottom of their list of recommendations because income protection insurance pays regularly and is easier to understand and manage.

On the other hand, disability cover pays its policyholders a lump sum amount of money which can work either in the favour of or against this policy. For many, it is an opportunity to benefit from the money whereas for others it may be a long wait for an amount not worth investing in.

Why You Should Get Disability Cover

The lump sum amount paid during disability cover is a relief to the policy holder, especially whenever they need to spend on equipment that would help them cope with their disabilities. The definition of each claim varies and defines who falls within certain categories. Therefore, the poor perception created against disability cover is misplaced and biased.

Another thing; the higher costs associated with disability coverage are quite reasonable when you think about the benefits that you receive in exchange for your premium. Though this form of insurance comes with a high cost and a higher premium, it is cost-effective because policyholders pay only half the cost of what they are being covered for.

The Bottom Line

Most people don’t want to think about the possible adverse events that may occur in their lives, which is why they don’t plan on investing in disability covers or other sorts of insurance plans. However, as you had just discovered, this decision can harm them and their dependents later.  So, it is always a better idea to invest in disability cover since it’s a reasonable insurance policy and a possible lifesaver during turbulent times.