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Permanent Disability Benefits (PDB)

Updated on October 4, 2023

The insurance contract is used as a safety net against any unfortunate incident that can affect the financial future of the family. The case of Permanent Disability Benefit is one of the main categories of insurance benefits.

What is the meaning of Permanent Disability Benefits?

Permanent Disability Benefit is a provision in insurance policies that provides financial compensation to an insured person in the event they sustain a permanent disability due to an accident or illness. This benefit is designed to offer support and financial security to the insured person and their family when they are no longer able to earn a living or require extensive medical care due to a disability. Permanent Disability Benefits can be found in several insurance policies, including Accidental Death and Disability Insurance, health insurance plans with specific riders and certain life insurance policies.

What are the types of Permanent Disability Benefits?

Permanent disabilities can arise from various causes and are generally categorized into two main types in insurance policies.

Total Permanent Disability (TPD) – It signifies the complete and lifelong inability to engage in any gainful occupation.

Partial Permanent Disability (PPD) – It represents a condition where the insured individual has impaired or lost the use of a specific body part or function but can still participate in some form of work, with the degree of impairment specified in the policy.

Understanding Permanent Disability Benefits

The calculation of benefits for permanent disability in insurance policies hinges on the disability’s severity, often outlined in the policy with specific benefit schedules, which could be a percentage of the sum insured or a predetermined fixed amount. To be eligible for this benefit, policyholders generally need to furnish medical evidence, including reports and assessments from qualified healthcare professionals, to validate the permanence and extent of the disability. In India, where robust social safety nets may be lacking, Permanent Disability Benefit holds significant value, offering financial support to individuals and families in times when earning an income becomes impossible due to a disability. However, individuals should carefully scrutinize policy details, including definitions of total and partial permanent disability, exclusions, and any waiting periods, to ensure they grasp the full scope of coverage.