Nifty Insurance Blogger

Having a disability insurance policy could be a lifesaver if you cannot work for a period, especially with a family; you might not be able to prevent the reason you are incapable of work but you can prevent the debt that can occur when you are not providing an income. The last thing anyone who is incapacitated wants is to worry about providing an income for their family. Statistics show that someone is more likely to have an extended period from work, owing to accident or injury, and need disability cover, than they are to die before they reach 65 years old.

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.

The calculations used for disability cover take into account a persons age, the type of work they do and their health in addition to the potential value of lost income, if they make a claim. 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; this way the claim would not be made immediately, saving the provider money. The other is opting for a shorter period of cover; however, if your period of incapacitation lasts longer than the period agreed, it will mean that you will have to find an alternative source of income.

Most policies will only cover a set percentage of your income so cannot be used to provide complete financial security and you will need to check this detail carefully. 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.

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. Some key issues to research in health policies include:

• If there are any medical restrictions
• Is the benefit taxable?
• Time frames before benefits are terminated
• Your current occupation

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. 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. 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.