Personal Disability Insurance

When you get sick or hurt, how do you expect to pay your bills? How do you think of running your life? Most people are better financially prepared for death with life insurance then if they get disabled, though chances are at least 3 to 5 times greater for a disability to occur! It is estimated that around 8 million adults have some form of disability, which limits or prevents them from working at one time or the other in their lives. It is even predicted that a 35 year old has a 50% chance of disability for 90 days or more before turning 65!

So basically, personal disability insurance is an insurance one buys to replace a portion of one’s income in the case one is unable to work because of injuries or illness. To obtain a personal disability insurance policy, compare the different rates of different insurance companies. It is best to get an insurance policy from a reputed company, and upon filling up the contact form, the policy is issued in a matter of a few days time.

Different Types Of Insurance Policies

There are two types of disability coverage available: short term disability and long term disability coverage. In short term disability, an income is provided for the early part of a disability for two weeks up to two years, with a waiting period of 0 to 14 days. This coverage is usually included as a part of an employee benefit package. In a long term disability policy, income is replaced for an extended period of time, usually ending after five years or when the disabled person turns 65. The waiting time here is several weeks to several months. This insurance is sometimes provided by one’s employees, while some have to purchase them individually.

In long term insurance, there are again two types of policies: non cancelable and guaranteed renewable insurance. In a non-cancelable policy, the insurance company cannot cancel the policy, except in cases of nonpayment of premiums. One can renew the policy every year without an increase in the premium or experience a reduction in benefits. In the case of guaranteed renewable policies, the same benefits of non-cancelable policy are offered. The difference between the two is that here, the premiums can be raised only if the change affects an entire class of policyholders. It is for this reason that initial premiums for guaranteed renewable policies are less expensive than non-cancelable policies.

One Can Return To Work And Still Collect Benefits

There are various options for one to choose from when getting a personal disability insurance policy. An additional purchase option is provided wherein the insurance company gives one the right to buy additional insurance at a later time. There is also the cost of living adjustment where the disability benefit is increased over time based on the increase in cost of living measured by the Consumer Price Index. One has to pay a higher premium here.

There is also the residual or partial disability rider where one returns to work part-time, collects salary and at the same time receives a partial disability payment if one is partially disabled. In the case of premium paid, there is the return of premium option where the insurance company refunds part of one’s premium if no claims are made for a specific period declared in the policy. The waiver of premium provision is an option where in one need not have to pay premiums on the policy once one has been disabled for 90 days.