Long or Short Term Disability Insurance Can Help

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Having an accident or protracting an illness can be a problem, especially when it prevents you from attending work. Long or 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, individual disability insurance is more expensive than life cover and it is important that the most competitive rates are sought. The calculations used for disability insurance take into account a persons age, the type of work they do and their health in addition to the potential value of lost income, if they make a claim. There are a few ways of reducing the cost of your disability insurance with the main one being selecting a longer period of time or waiting period following an accident or illness before the disability insurance payments commence. Some people find that by setting the plan to pay for only a set period of time, they can dramatically reduce the premiums they have to pay as it eases the potential burden to the insurance company but can be a problem if the time out of work lasts longer than the plan provides for.

Whatever your situation though, common disability insurance usually covers only a specific percentage of your original salary. Reduced period disability insurance is also known as short term disability and although it may only last a few months, the benefits can be greater to the claimant. However, if someone takes out total disability insurance which would provide a reduced financial income for a longer period, they will probably have to show proof that they could no longer perform tasks they could before the incapacitation. In any event if a person suffers an injury and are unable to return to work, either temporarily or permanently, they will receive weekly or monthly disability checks.

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. Also, remember that not all disability insurance policies will cover you with the same percentage of your original salary. The percentages vary and disability insurance payouts can be anywhere from 40% to 70%, so don’t neglect this important detail. This one fact amongst all of them should be the most important one to check on in detail because once you are incapacitated it is too late.

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