Insurance, is a one of the most popular words in the enlgish language. Not only Life insurance, Vehicle insurance, Health insurance, individuals today go for even body parts insurance, like eyes or leg insurance. And talking about Disability Insurance, it is decidedly one of the much sought after kinds of insurance.
This insurance, justifying its name, helps the policyholder to take care of his or her necessities when the person is unable to go to work due to illness or injury. Some studies show that one in three people becomes disabled by the age of 35; they get disabled minimum for three months before attaining the age of 65; and one in ten may face a permanent disability. This type of coverage will, undoubtedly, solve some of your financial problems such as medical and rehabilitation expenses.
In general, disability insurance is available in two kinds: short term disability insurance and long term disability insurance. Long-term insurance covers periods more than six months until the time of retirement. No insurance company will offer coverage of 100% of your salary feeling that you will not go back to work even after becoming fully fit. Short-term disability insurance covers 40% to 60% of the policyholder's actual income
while long-term insurance will offer 75% to 80% on a tax-free basis. Tax-free if you pay the premiums rather than your employer. So, it is wise to get as much coverage as possible.
Either, people can go for disability insurance issued by the government or get it as insurance policy provided by their employers. For the most part, the insurance coverage provided by the employer closes at the time of termination of the employee's employment. Several areas are able to manage public disability insurance coverage policy financed by payroll taxes.
Once again, you have to look into several important factors while choosing a disability insurance policy. Such factors as total disability and renewability have to be considered cautiously. Check with your insurance broker for the most recent and regulations in your area.
Select the policy that gives the clause that the insurance company cannot cancel or raise your premiums so that you will not be forced to cancel the policy. Better look for a non-cancelable policy or guaranteed renewable policy. With this policy you will not be singled out and the raise in premiums could be done only with the permission of the whole class of insured people. Conditionally renewable policies are also well received.
Also, elimination as well as benefit periods and policy exclusions should to be keenly studied. To promote disability insurance, various optional riders such as cost of living, are available. The additional clauses also comprise automatic increase rider, social-insurance-substitute-rider and residual-disability insurance. So, know everything about the policy before going for it. An informed choice is always a better choice. Your insurance broker can be invaluable with this process.
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