Long and Short Term Disability Insurance
Posted in: insurance articles Tags: disability insurance, short term disablility insurance
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Having an accident or protracting an illness can be a problem, especially when it prevents you from attending work. A short term disability insurance policy 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, single person 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.
Whatever your situation though, economical insurance medical coverage 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.
Other key points to consider when looking into disability insurance are if there are restrictions on pre-existing medical conditions, whether your occupation will increase the cost of premiums, how long the payments are made and whether you will have to pay tax on the benefit. 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. To give you an example: some disability insurance plans pay out as much as seventy percent of your monthly income in benefit whereas others can pay as low as forty percent so you need to do your research to avoid being paid less than you can afford to survive on. More than any other factor, it is this one that you need to be sure of as once you have taken out the plan and found it necessary to make a claim, it will be too late for you to change it.