Nifty Insurance Blogger

Should you unfortunately have an accident or are sick, disability insurance has been designed to provide an income for you; despite illness or accident, household bills still need to be paid. This can take some of the emotional strain away the financial difficulties it is certain to create during your incapacitation. 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.

However, more people buy life insurance long before considering the advantages of disability coverage. 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. Searching for a low disability insurance premium is a key element as it costs more to run this type of plan.

Premiums are based on many characteristics like age, occupation, health and the calculations of potential lost income. There are a few ways of reducing the costs with the main one being selecting a longer period of time or waiting period before the plan starts to pay; with this in place there is less probability of the claimant making a claim. Alternatively the policy holder could request a shorter cover period which would only cater for short periods off work; with this arrangement the risk is placed squarely on the shoulders of the claimant who will need to find additional income if the incapacity period is long.

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.

Whatever the situation, a person making a claim owing to incapacitation will be sent a disability benefit check every month until the end of the plan or they return to work. Other key points to consider when looking into health policies are if there are restrictions on:

• If there are any medical restrictions
• Monthly benefit payment is taxable or tax free
• Time frames for benefits
• Your own occupation versus any 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. With some providers giving 70 percent of the original salary, you will have to watch out for those who will only provide you with a very low 40 percent which could cause financial hardship. 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.