Disability Insurance Articles

The Advantages Of A Sound Disability Insurance Policy

2011-01-20

For those of us who go to work every day to support ourselves and our families, there is always a hidden concern in the back of our minds; what if I got sick or injured and could no longer work? What would happen; how would I pay my bills? That is exactly what a disability insurance policy is designed to address. The advantages of disability insurance put that potential problem on the back burner so we never have to worry about it again.

There is not a single disability insurance policy that covers all bases for all workers. Rather, the various options available, such as the term of coverage and the percentage of your salary that you choose to replace if disabled and make it possible to tailor your coverage to fit your particular needs. There are though, certain rules and limits of coverage that you should understand but in general, the advantages of disability insurance including the peace of mind that comes with it, are worth far more than cost.

Disability insurance is not meant as a permanent replacement for your income. It is intended to fill in the gaps and to help with supplementary income in the event that you are unable to perform the regular responsibilities of your job. If this coverage is not offered by your employer, it can be purchased on an individual basis. Disability will replace the portion of your income that you select, as a rule the maximum is 65% of the insured's income for the previous year. A flat monthly payment is another option. For high end earners, there is a cap on the actual dollar amount that can be paid regardless of income.

The length of time during which payments are made depends on what you are willing to pay. Most commonly, the maximum for an average policy is five years but expensive policies may carry you to retirement age when social security takes effect; this would be a long term disability insurance policy. It is important to understand that most policies will pay the full policy amount only if the insured party is unable to work at all. If he is capable of obtaining work and performing tasks other than his original job duties, the policy may not pay.

The money received from your disability policy is usually tax exempt and the coverage is portable. That means that you own the policy and can take it with you if you change jobs or relocate. The cost of disability coverage compared to the protection that it provides makes a disability insurance policy one of the best purchases you can make for the security of your family.