Disability Insurance – Important Considerations For Choosing The Best Policy

disability-insurance-example1 If you are like most people, you probably don’t like to imagine what might happen if you became disabled. Unfortunately, many people depending on their paychecks at the end of the month have to deal with some form of disability at some point, even if it is only temporary. It is also worth noting that disability does not just occur as a result of accidents. Many long-term absences from work are caused by illnesses like cancer or heart disease. Disability insurance is meant to protect you from the devastating effects that loss of income could have on your financial stability.

How much is insured?

Disability insurance will typically replace a portion of what you earn if you become disabled and can no longer work. Group plans offered by employers will usually replace up to 60 percent of your income, while disability insurance for individuals will insure up to 75 and even 80 percent of your income. In a group plan, the disability benefits would be tax-free if you paid the premium yourself as opposed to your employer paying for it. Almost all group plans have a maximum benefit limit that could mean getting even less than the expected 60 percent.

How long will you receive benefits?

Disability benefits usually last for a specified number of years, but they could also last until you get to retirement age. The reason why the benefits stop at retirement age is because you would not be dependent on income generated by working even if you did not have to deal with disability. Again, most group policies will limit the benefit period – after two years, you will probably need to get training for a new job or prove you cannot work at all more information here.

Individual coverage

If you are a self-employed individual or if your employer does not provide disability insurance coverage, an individual plan would be the alternative. In addition to insuring up to 20 percent more of your income, you may also be able to cover your income bonuses, a benefit you would not enjoy in a group plan. In fact, you could opt out of your employer’s group plan in favor of individual disability insurance if you can pay for it. An individual policy will also remain intact in case you switch jobs, another benefit that group plans do not offer.

How much do you pay?

The cost of your disability insurance policy will be dependent on several factors including your gender, age, amount of coverage and your health status. Lifestyle choices such as smoking could also increase the amount you pay in premiums. A disability insurance quote will give you a good idea of how much a policy might cost you based on your particular circumstances. However, you could lower your premiums by choosing a longer waiting period (period following your disability or illness and prior to receiving your benefits).

When considering various options, going for the most competitive disability insurance rates may not get you the best cover. Disability insurance policies from different companies will vary, and while buying an affordable policy is important, it is also important to ensure that you are getting adequate cover and appropriate benefits. You may also want to know more about TPD Insurance visit our page.

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