Disability Insurance Odds

When one thinks of insurance, one thinks of insurance for their home, car or medical needs. Seldom does one realize that to afford all these items, one’s income is required, without which it would be impossible to maintain them. It’s a known fact that at any given age, the odds of becoming disabled are much higher than dying. So it’s for this reason disability insurance is important, as it protects one’s income. The policy provides coverage if the policyholder becomes disabled and can no longer work to earn some income. This is an insurance policy that practically any person is advised to take, as one never knows when one may become disabled!

Rich Can’t Avail Disability Insurance

To avail a disability insurance policy, one has to approach an insurance company, available aplenty on the internet and in one’s neighborhood. It’s advisable to compare the quotes of different companies before settling down on the right company. Upon filling the contact form with personal particulars, and verification by the company, the policy is issued. While applying for this insurance, the company informs you if you have too much money to qualify for coverage. This is because unlike life insurance, one can’t buy all the disability insurance one needs. One can get only a maximum of 50-60% of monthly income before taxes as the company has no intention of deterring anyone from returning to work!

Total Disability Should Begin Before 65th Birthday

In a long term income insurance policy, a monthly sum is paid to cover one’s expenses in the case of disablement and thus, non-functioning of one’s chosen occupation. It has a provision that protects one in the event of an accidental loss to one’s ability to work!

Basically, there are two types of disability insurance benefits awarded to policyholders. The first is the waiver of premiums due to total disability, where as the name suggests, premium is waivered if the insured becomes totally disabled. Here, the insured should have a mental or physical disability, which prevents him from working; the total disability should begin before the insured’s 65th birthday and last for six consecutive months, and the total disability may not begin before the effective date of the policy.

The other benefit is the total disability income provision rider which provides for monthly payments to be paid to the insured from the first of the seventh month of the insured’s continued total disability, till the disability continues. It should be noted that this provision must be opted for before the policyholder’s 56th birthday, while in good health. The conditions for this benefit are the same as before.

State Also Provides Disability Insurance

In addition to health, dental and life insurance, some employers offer disability insurance to attract and retain employees; with some even paying 100% coverage for the employees! There are also state disability insurance benefits awarded in a few states like California and New York. Those who don’t have private or employer-provided disability insurance benefits are covered in this program. Those who had paid Social Security taxes can collect Social Security Disability Insurance. This insurance though, unlike others, does not cover partial or short-term disabilities. In the case of Workers’ Compensation Disability Insurance, the same coverage is provided, but the disablement must have occurred while the policyholder was on the job or had developed a disabling, job-related illness.