Nifty Insurance Blogger

Disability insurance is intended to replace your income if you should become sick, disabled, or hurt; despite illness or accident, household bills still need to be paid. The thoughts of how your loved ones will survive, causes additional and unnecessary stress at a time when you should be concentrating on recovering. In fact statistically the average person will probably need some kind of disability cover before they retire.

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.

Premiums are based on many characteristics like age, occupation, health and the calculations of potential lost income. To help reduce the possible financial impact of taking out of the premiums it is possible to delay when the first payments are made; with this in place there is less probability of the claimant making a claim. Another option to lower the monthly premiums is put a limit on how long the payments are to be made before they stop although; this can be a risky move if the period of incapacity is longer than the period arranged for payment.

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. Health insurers offer two main types of coverage: the first is for short term disability insurance protection lasting only a matter of months. On the other hand, total disability cover can provide limited financial cover for a much longer period but it will be the responsibility of the claimant to prove that they are unable to carry out work related tasks that provided their income previously.

Irrespective of the type of policy you have, payments for disability are made regularly, every week or month until the end of the incapacitation or the policy, whichever come first. Other key points to consider when looking into health policies are if there are restrictions on:

• Any previous medical problems
• Monthly benefit payment is taxable or tax free
• How long the benefits will be paid for
• Your own occupation versus any occupation

The level of cover provided for your original salary will differ with each insurer’s disability insurance policy. This percentage of your income paid by your insurance plan can be as little as forty percent or as much as seventy percent, so you can see there is quite some variation. This figure will probably be the determining factor of whether you sign with a particular insurer or not but it must be done before any agreement is signed.