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How can I purchase Disability Insurance?

July 14th, 2008

Should you unfortunately have an accident or are sick, disability insurance has been designed to provide an income for you; when you have financial responsibilities you need to have an income if you are incapacitated. This allows a person who is incapacitated to get well without having to worry about how their family will survive. In fact there is a higher probability of a worker requiring disability protection before they retire than there is of them dying.

The problem is that life insurance is the number one consideration for most people, especially when they have dependants, without even looking into the benefits of covering themselves against disability. Trying to convince a worker of forty they will probably need 90 days off through injury before they retire is hard work. Like all types of health protection, searching for the best disability insurance rates is imperative.

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; with this in place there is less probability of the claimant making a claim. Alternatively the policy holder could request a shorter cover period which would only cater for short periods off work; whilst this can save money on the premium, the claimant could end up incapacitated longer than the payments are planned for.

Whatever your situation though, common plans usually cover only a specific percentage of your original salary. 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.

Payments will continue to be made regularly whilst the conditions are met until the claimant can return to work or the cover ends. Other key points to consider when looking into health policies are if there are restrictions on:

*Restrictions on Pre-existing medical conditions *Is the benefit taxable? *When do the payments stop? *Your own occupation versus any occupation

Remember that not all disability insurance policies will cover you with the same percentage of your original salary. To give you an example: some insurance plans pay out as much as seventy percent of your monthly income in benefit whereas others can pay as low as forty percent so you need to do your research to avoid being paid less than you can afford to survive on. If maintaining your income is important then this issue, on its own, will determine which company you choose.

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