Why You Need Disability Insurance

Most people take it for granted. They can awake each day and earn an income to support themselves and their family. The ability to be independent in this regard is one of your most valuable assets. Additionally, most people do not realize the high likelihood of becoming disabled during their working career. This probability is higher than they would imagine. Hence, disability insurance is available to protect your assets.

Disability insurance is intended to replace your income. This occurs if you become sick, disabled, or hurt. The illness or accident must prevent you from earning an income in your occupation. Disability insurance will pay anywhere from 45% to 60% of your gross income during your absence from work.

It is important to note though, that not every policy is the same. Carefully scrutinizing the details and comparison-shopping is necessary when shopping for disability insurance. The least expensive policy is not necessarily a good choice. You have a fair chance of receiving a monthly advantage. This benefit will cover your cost of living while you are disabled. This is especially true if you have purchased a low-cost insurance policy.

The purpose of this article is to give useful information about the features of disability insurance. This information will help you make an informed decision when purchasing your insurance policy.

Types of disability insurance

Short-term disability is as it name implies. This policy may pay benefits for two weeks up to two years. Usually, your employer provides short-term disability policies.

Long-term disability as its name implies, will provide benefits for an extended period. Long-term disability insurance usually lasts about 5 years. This type of insurance will also expire when the person turns 65. Some employers will include this type of insurance in the employee compensation package. Others will make it available at a specific cost.

The two main types of long-term disability insurance policies are non-cancelable and guaranteed renewable. A non-cancelable and guaranteed renewable policy means the insurer cannot cancel your policy. They also cannot decline to renew it as long as the required premiums are paid on time. However, there are significant differences between the two policies. With a guaranteed renewable policy, the premiums can be raised. This increase is applicable only if it affects the entire class of policyholders. Under a non-cancelable contract, the premium payment remains in effect as stated on the policy. As a result, starting premiums for guaranteed renewable policies can be less expensive than non-cancelable policies