Basic Types Of Disability Insurance

April 29 ,2011 by admin

If you live in this era, you must be familiar with the term ‘insurance’ and the role it plays in day-to-day life. There are different types of insurance today such as car insurance, pet insurance, home insurance, travel insurance, life insurance among many others. Of all the basic types of insurances available in the market, life insurance and car insurance are the most common that many people opt for, but mostly at the expense of other equally important categories of insurance. This article seeks to expound more on a much-neglected, although very important category of insurance today – the disability insurance.

 

Disability insurance is a type that will help you when you can no longer afford to work because of a disability brought about by an illness, injury, or an accident. Contrary to many people’s belief, disability insurance isn’t complex at all, actually it is very straight forward in that it will take care of your income when you can longer get out there and work for it because of a disability.

short term disability

 

Just like in any other type of insurance today, disability insurance has different types and policies all which are tailored for different needs. Therefore, doing a thorough market study and analysis will be very important before finally committing yourself to any type of disability insurance policy so as to ensure you reap the most out of it when the time finally comes of using the policy that you have been paying faithfully for the better part of your being able to work.

 

Generally, disability insurance is divided into two – short term and long term disability insurances. Short-term disability insurance will cover approximately 40-60% of your total gross income while its long-term counterpart will cover 75-80% of your total gross income. By the same token, a short-term policy can be available for a period of one year while its long-term counterpart can be available for a period of up to 5 years. Be advised though that the longer the period, in which you will receive the benefits, the more expensive it will be when it comes to paying the insurance premiums.

 

There are important factors that you need to consider before choosing any time of disability insurance policy. Such things as total disability and renewability are very critical points of consideration. Always choose a policy that can only be cancelled by you and not by your insurer. By the same token, you should avoid insurance policies that expect you to pay a penalty fee for cancelling the policy.