Disability and insurance is a topic many always think about time to time. When many people peer into their unclear future, they fail to know or guess whether they will continue making money in their place of employment or basically in any employment position. However, that income could at one time be stopped by some form of disability. If that happens, all financial plans would be put in disarray.
This makes many to question the necessity of disability insurance and to try and understand it. Disability insurance comes at the right time to help in replacing some part of one’s income in case it is impossible for a person to keep working as a result of injury or illness. For those with a built up emergency fund, they hardly understand much about disability insurance for the long period it might be needed. Long term disability cover starts working once a person has been disabled for a couple of weeks.
For some people, rather than go for life insurance, they better get disability cover. To support this argument, a 35 year old is more times likely to be disabled than lose his or her life. In fact, this is something that brings many people into the stark reality they might have life insurance but no disability cover of any kind. However, a number of things have to be understood to ascertain if disability policy is really necessary.
Period Of Waiting
This is the period of time one becomes disabled up to the time the cover begins to pay. As per the company, the disability policies could range from 30 to 90 days of waiting. What happens at that time is the company offering the cover is ascertaining whether the disability you have is long-term or not before payment begins. To have this waiting period covered, you can always seek emergency fund or prepare for one.
You will also notice the more the waiting period, the affordable the cover. For 12 month disability with a week of waiting period, the costs are higher than a three decade cover with three month waiting period.
Period Of Benefit
This is the total period of time the benefits are released. A cover company only pays once a person is disabled. This means if you recover after six months, the disability insurance benefits have to stop. However, if a person is permanently disabled and there are no chances of improvement or recovery, the importance of the period of benefit kicks in. A policy is provided and will depend on many factors, such as a policy that goes up to the age of 65. As far as you are still disabled, the policy pays until you are beyond the agreed age.
Nature Of Disability
As you look into disability and insurance, the type of disability covered is something you need to really pay attention to. This type of policy is written in the form of any occupation or own-occupation. In own-occupation coverage policy, the benefits are mostly paid if you are not able to carry out the job or occupation you enjoyed before the onset of the disability. In case you were a firefighter an unable to discharge your duties at work, the policy only pays as far as performing old duties is impossible.
Any occupation type of policy pays only if a person is unable to perform any job, meaning own-occupation might be a better option.
Author Clint Winfrey writes on fields mainly related to business and insurance. He loves to spend his leisure time with his kids, and write articles for Memphis Insurance.