This plan provides regular payments of benefits for disabled policy holder who is unable to work. Insurance product replaces your gross income anywhere from around 45% to 65% on a tax-free basis should your illness or injury keep you from earning an income from your job or practicing your occupation
In case you are unable to work due to an accident or illness, disability insurance replaces your income. Although some forms of insurance of disability are enjoyed by many employees from the employer or government; but these might be inadequate to cover all of your needs.
Long-term plans vs. short term
DI could either be long term disability insurance (LTD) or short term disability insurance.
Long term disability insurance is a protection for employees from loss of income in the event of his/her inability to work due to illness, injury, or accident over a long period of time. The benefit is payable after the waiting period (usually from 30 to 180 days) has expired. The insurance company will continue to pay you this benefit for as long as you remain disabled or until the benefit period runs out, whichever comes first. Long term disability insurance programs provide benefits to age 65; however some plans have benefit periods as short as five years.
The coverage of this disability insurance is short but is the most affordable for those individuals who are unable to work for short periods of time. The usual policy provides coverage from three to six months. Due to short duration, these insurance is the most inexpensive option compared to the long term disability insurance.
Advantages of Disability Insurance
- You can receive a portion of your latest income in the event that you get disabled.
This is a great help to your monthly bills and daily needs. You do not need to worry about threat of foreclosures or the possibility of filing for bankruptcy due to loss of income.
- Disability insurance provides adequate set of protection for your income.
You need to protect your income to make sure that your family can still afford their needs in the event of your death or disability.
- Disability insurance payments will not be affected by other sources.
Payments for disability insurance remain the same and not affected by any other payment received from compensation plans administered by government like the Social Security disability insurance.
- With disability insurance payments, you can enjoy more treatments.
You will have more spending-money for other needs; consult therapies or purchase medications during your recovery.
It pays to purchase a disability Insurance and critical illness insurance. It is like an umbrella protecting you and your loved ones from harsh weather and the element. When you suffer from critical illness or suffer injury, you will heal faster feeling confident of this security.