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Disability Insurance


Although it is hard planning for good events, it is much easier, although less pleasurable, to make arrangements for the bad but disability insurance can help; financial commitments mean we all have regular bills to pay whether we are sick or not. Often the biggest strain when you are unable to work is that knowing you must try and recover as quickly as possible for the sake of your family. In fact statistically the average person will probably need some kind of disability cover before they retire.

Unfortunately, this fact is often overlooked when life insurance coverage is being arranged. For example for a forty year old there is a greater chance of a disability that requires at least ninety days from work, than there is of dying before the age of sixty five. Of course, when someone is seeking disability insurance cover, it is imperative to find the best rates and plans available.

Although calculating the premium can be a complicated process, the largest factor involved is the income level the claimant requires. One method of lowering the policy premium is arranging for the plan to ‘kick in' only after the incapacity has lasted for a set period of time. this means the provider would have less risk of paying out if the insured was only off from work for a short period. The other is opting for a shorter period of cover; whilst this can save money on the premium, the claimant could end up incapacitated longer than the payments are planned for.

Even these plans are not full proof because they will guarantee only a fraction of the pay which means that other arrangements will have to be made. Short term disability insurance income covers the first few months you are disabled but the benefits of short-term disability income insurance are many. The other option is total disability cover; this can provide a long term (but reduced) income although this is only granted if the person can show they are no longer able to carry out their previous job.

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. Other key points to consider when looking into health policies are if there are restrictions on:

* Any previous medical problems
* Whether the income is taxable
* Time frames before benefits are terminated
* Whether your occupation will increase the cost of premiums

Each policy is different so the amount of salary the disability insurance plan will pay will depend entirely on the policy you decide to go with. This variation is quite large with some only giving a measly forty percent of the salary whilst better plans will give up to seventy percent. This figure will probably be the determining factor of whether you sign with a particular insurer or not but it must be done before any agreement is signed.
 


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