Disability Insurance

Although we do not like to plan for accident or injury, these things happen and it's a disability insurance plan that will help you out of this situation; when you have financial responsibilities you need to have an income if you are incapacitated. With the stress and frustration caused by a temporary or permanent disability, this type of cover can help you ‘weather' any financial difficulties. The chances of dying before 65 are actually lower than the possibility of needing disability protection before then!

The fact of the matter is that disability coverage appears to be less important to the public when they have a family; whereas life insurance takes priority even though they have less chance of dying than being incapacitated. For example for a forty year old there is a greater chance of a disability that requires at least ninety days from work, than there is of dying before the age of sixty five. The problem is disability insurance costs more than basic life cover as it is costlier to provide.

Although calculating the premium can be a complicated process, the largest factor involved is the income level the claimant requires. To help reduce the possible financial impact of taking out of the premiums it is possible to delay when the first payments are made; the provider would be less at risk if was only a short term incapacity. A reduced period of cover option would also reduce the premium; this can be a risky move if the period of incapacity is longer than the period arranged for payment.

Most policies will only cover a set percentage of your income so cannot be used to provide complete financial security and you will need to check this detail carefully. The two main types are short term and total disability insurance; the short term will only cover a set number of months but may have improved benefits. 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. There are many issues to consider when exploring health plans which may affect the premiums and they include, in no particular order:

* Restrictions on Pre-existing medical conditions
* Monthly benefit payment is taxable or tax free
* How long the benefits will be paid for
* Details of employment

The level of cover provided for your original salary will differ with each insurer's disability insurance policy. 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.