Protect Yourself Against The Financial Turmoils Brought On By Disability
When you have a family, disability insurance is not a luxury any longer but a necessity; this can provide an income until you are able to return to full employment. A person who is not able to work can recover without the stress of financial responsibilities to worry about. In fact there is a higher probability of a person requiring some form of protection against disability before they retire than the likelihood of dying.
It is an unfortunate fact that most people think they have a greater chance of dying than being laid off work through disability so life insurance policies are more popular. 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. The problem is disability insurance costs more than basic life cover as it is costlier to provide.
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. so effectively reducing the possibility of claiming on the policy. Alternatively the policy holder could request a shorter cover period which would only cater for short periods off work; this can be a risky move if the period of incapacity is longer than the period arranged for payment.
Almost all plans are based on a percentage of salary so even with this protection a certain shortfall will exist. Health insurers offer two main types of coverage: the first is for short term disability insurance protection lasting only a matter of months. Total disability cover is in force for a longer period albeit at a reduced rate but the onus is on the claimant to prove they can no longer perform the work they carried out before.
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 health plans which may affect the premiums and they include, in no particular order:
- Attitude towards pre-existing conditions
- Whether you will have to pay tax on the benefit
- How long the payments are made
- Your current occupation
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. These percentages vary and payouts can be anywhere from 40 to 70 percent, so don’t neglect this important detail. This needs to be checked thoroughly especially if you have a family with large financial commitments each month.
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