Will your company pay for your long term disability? Most likely not.
One of the greatest fears, among many Singaporeans, is suffering from injuries so severe that they are unable to work.
As of 2020, major injuries constitute around 14 per cent of workplace injuries. These include injuries as serious as blindness and amputation, down to concussions or other injuries that require 20 or more days of leave. In the event this happens to us, are we still covered by company insurance policies?
Or could we end up without pay for a long time? Here’s what you must know:
Work Injury Compensation Insurance (WIC) in Singapore
When Singaporeans refer to “company insurance”, they are often referring to WIC. This is an insurance policy that the Ministry of Manpower (MOM) has made compulsory for all employers.
However, WIC has some important limitations:
● Your employer may not be required to buy WIC for you
● Coverage may be too limited for serious injuries
● Non-occupational injuries are not covered
Let’s go through them slowly.
Your employer may not be required to buy WIC for you
Your employer must buy WIC for employees providing manual work, such as welders, lifters, construction site workers, etc.
However, if you're doing non-manual work (e.g. an office job), your employer is only required to buy WIC for you if you earn below $2,600 per month.
In addition, you must be under a contract of service.
A contract of service is different from a contract for service. Only those with a contract of service count as employees. For example, if you’re a consultant and work on a contract basis, you are not actually an employee - the company isn’t required to buy WIC for you.
Coverage may be too limited for serious injuries
Under WIC, the maximum required claim limit for permanent incapacity (i.e. permanent inability to work) is $289,000, for accidents occurring on or after 1st January 2020. The minimum required coverage is a mere $97,000.
Even with a successful maximum claim, it’s improbable that the sum can make up for permanent disabilities, or a lifetime without work.
For medical expenses, the maximum claim is $45,000 or claims for up to one year after the accident; whichever occurs first. For example, if your medical expenses reach $45,000 in the first six months, you would then be deprived of any further help from that point.
If you have a serious disability that takes a few years to recover from, this can leave you in a difficult position.
Non-occupational injuries are not covered.
Non-occupational injuries are those sustained outside the course of work. The definition of non-occupational activities, however, are quite broad. For example:
Say you decide to drive home after work, and get into an accident. This leaves you disabled, and unable to work for a year. You will not be covered by WIC, as it can be argued that your injury was not sustained as part of your occupation.
In fact, even if you detour to do something personal during working hours - such as driving to send the children home during your lunch break - you won’t be covered by WIC if you get into an accident.
What about other forms of group insurance?
Some employers have policies beyond WIC, to protect employees. This is commonly known as group insurance, and can include disability income, critical illness, health insurance, and others.
These policies vary greatly based on what your company chooses to buy. You may not have any say in the amount of coverage, or on the conditions to be covered. Some companies may allow employees to vote on this, but not all are as flexible.
For example, one company may have insurance that provides disability income, paying 70 per cent of your salary while you’re injured and unable to work. Another company may only have life insurance, paying out a lump sum if you suffer a total loss (e.g. permanent conditions such as blindness, loss of two limbs, or anything that prevents you working forever).
Companies can also change the coverage, at their own discretion. For example, you may find that - a few years down the road - the company has chosen to reduce the disability payout, to save on premiums.
So while group insurance can provide for your disability, you should be aware the coverage and terms are not under your control.
Always have your own disability insurance
Your company’s insurance policies only apply for as long as you work for them. If you quit, get retrenched, or get “re-hired” after 65 in a contract position, you’ll no longer be protected.
In addition, group insurance is not tailored to specific needs. Whether you’re single, or the sole breadwinner providing for a family of four, the coverage is the same: it’s whatever amount your employer deems acceptable.
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