Disability Insurance: Can You Afford to Live without Your Income?
Getting a life insurance is facing the reality—the reality that your family will be burdened with a financial problem in the unfortunate event of your death. Unbeknownst to a lot of people, we all need the financial protection that can be provided by the disability insurance even during our working years.
Read on and be guided by these important points in the event that you decide to avail of a disability insurance policy.
What is disability insurance?
There are two varying definitions of the term disability (used in the insurance jargon), and both are dependent on the output one is able to produce in one’s occupation. The first definition characterizes it as the condition in which a person is hindered from accomplishing his fundamental functions in his occupation. Insurance companies summarize this as the condition in which they have to pay the client his benefits as he is unable to produce expected output in his occupation due to sickness or injury. The second less-favorable definition entails that a disabled person is unable to find employment in any gainful occupation.
Also, two types of disability coverage exist. The short-term disability pays benefits or an income during the onset of the disability. Such policy may do so in a span of two weeks up to a couple of years and is considered as part of one’s employment package. On the other hand, the long-term disability will replace one’s income in a more extended period of time. Most companies provide this kind of insurance to their employees.
What must be the financial capacity of the insurance company?
Of course, it should go without saying that this is the most important matter that you should consider when deciding on which company to avail a disability insurance policy from. Know the history of the company and its financial status. Reviewing these things will help you determine if they are actually going to be beneficial to you in the long run. A highly rated, financially strong insurance company with the best residual benefit is the most recommended.
What are the residual and back-to-work benefits?
When deciding on which company to get your insurance from, consider this in their terms provided: your residual and back-to-work benefits. It is important to distinguish which company will give you the most beneficial offer in the event that you are out of income due to a disability. While some companies may continue to provide benefits even after you’re back at work, some companies may not give further benefits once you are back at work three months after suffering from an illness or an injury.
Yes, we all have to admit the bitter truth: we are all susceptible to suffer from some disability, some illness, or injury at some point in our lives. And as hard as it would be to imagine that, the only consolation we have is at least we have the capacity to picture the consequences and prevent them from happening. Choosing the right disability insurance may just be your hope in insuring yourself and your loved ones.
by Maria-Goldsmith 19 years ago