Disabled from waist down, but Dependents' Protection Scheme insurance claim denied

On 3rd September 2013's issue of the Straits Times, the Forum section featured a letter from Ms Wendy Tan, who shared that she was disabled from the waist down due to a spinal cord injury sustained during an accident last year.

She could not feel her legs and experiences pain in her lower back. As a result, she had to leave her banking job which she held on for 12 years, as she is unable to work now.

After filing a claim under the Dependents' Protection Scheme (DPS) with NTUC Income, her claim was rejected as she could still perform sedentary work. The policy would only payout upon death or permanent incapacity, which Ms Tan's condition don't qualify.

Here is the full article:

On 4th September, Straits Times published the reply from NTUC Income which reiterated the point that if a person is able to perform simple or sedentary forms of work, she is not considered to be permanently incapacitated. As such, they were not able to accept her claim.

Here is the reply:

Here are the exact wordings extracted from the DPS Terms and Conditions:

"… Permanent incapacity means being physically or mentally disable from ever continuing in any employment (including self-employment)."

Here is a link to the DPS policy terms and conditions: http://www.income.com.sg/forms/insDocument/DPS.pdf


I would like to emphasise that not all insurance policies work the same way. Even for disability, there are a few definitions in the market, such as:
- unable to work in any occupation;
- unable to work in your own occupation;
- unable to work for a period of time (usually 12 months);
- loss of use of 2 limbs, 2 eyes, or a combination of 1 eye and 1 limb. The disability must be from the wrist and/or ankle upwards;
- etc

Therefore it is important that you understand the coverage of your insurance policy clearly and know what is covered and what is not. 

Also, this case highlights the risk of depending on the government's insurance scheme such as DPS, Home Protection Scheme (HPS) or the basic Medishield. These schemes are designed to provide very basic insurance cover for the mass public and designed to be affordable. Being affordable also means that it might not be as comprehensive as insurance policies that is purchased privately. 

Same goes for your company's group insurance policies. Most company insurance policies do not cover the employee comprehensively, unless one is in the senior management position. Also, an employee will lose the valuable coverage once he or she leaves the company. 

Please seek professional financial consultation if you do not understand any part of your policy, or require an assessment of your portfolio.

CJH