Having an accident or protracting an illness can be a problem, especially when it prevents you from attending work. Long or short term disability insurance has been designed to ensure you still receive an income until you are able to return to full employment. With the stress and frustration caused by a temporary or permanent disability, disability insurance can help you not only weather the financial difficulties you may encounter during your incapacitation but also to take some of the emotional strain away the financial difficulties it is certain to create. Statistics show that someone is more likely to have an extended period from work, owing to accident or injury, and need disability insurance, than they are to die before they reach 65 years old. Unfortunately, this fact is often overlooked when life insurance coverage is being arranged. If you are aged 40 for example, there is a higher chance that you will be disabled, and thus unable to work for a period of 90 days or more, than of you dying before the age of 65.
Owing to the probability of it being used, disability insurance is more expensive than life cover and it is important that the most competitive rates are sought. Premiums for disability insurance are based on many characteristics like age, occupation, health and the calculations of potential lost income. Many people find that they can reduce their monthly disability insurance premiums buy delaying when the first payment would be made to them if they were to make a claim on their disability insurance plan. Another option to lower the monthly premiums is put a limit on how long the payments are to be made before they stop although if you your period of incapacitation lasts longer than this, it will mean that you will have to find an alternative source of income.
Insurance company policies will differ but the majority will only pay a percentage of your lost income so it is a good idea to choose the best one for you and in this instance, the cheapest disability insurance may not necessarily be the best. Short term disability insurance income covers the first few months you are disabled and the benefits of short-term disability income insurance are many. Whereas if someone wants to claim total disability and be completely covered financially, then they will have to prove that they are unable to perform the majority of the tasks that they used to. Irrespective of the type of policy you have, payments for disability are made regularly, every week or month until the end of the incapacitation or the policy, whichever come first.
There are many issues to consider when exploring disability insurance which may affect the premiums and they include, in no particular order; your current occupation, whether the income is taxable, how long the benefits will be paid for and if there are any medical restrictions. Remember that every disability insurance policy is different and they will not all provide exactly the same benefits, including how much they will pay as a percentage of your income. The percentages vary and disability insurance payouts can be anywhere from 40% to 70%, so don’t neglect this important detail. It is the number one factor that will define what your income will be in case you become disabled.