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.

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. Despite statistics showing that a middle aged worker has a greater chance of needing a 3 month break from work because of an accident as opposed to dying before they reach 65, is almost impossible. 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. You can of course place a payment delay period on the policy to help lower the premium. this way the claim would not be made immediately, saving the provider money. Alternatively the policy holder could request a shorter cover period which would only cater for short periods off work; although you need to bear in mind that once your period of benefit ceases you would have to support yourself.

Insurance company policies will differ but the majority will only pay a percentage of your lost income so it is a good idea to choose the best one for you and in this instance, the cheapest may not necessarily be the best. The two main types are short term and total disability insurance; the short term will only cover a set number of months but may have improved benefits. The other option is total disability cover; this can provide a long term (but reduced) income although this is only granted if the person can show they are no longer able to carry out their previous job.

Irrespective of the circumstances, when a person is approved for these payments they may receive them weekly or every calendar month. 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.