What do you need to know about Disability Insurance?

Thu, Apr 26, 2012

Financial Advice

Nowadays, insurance is offered on everything you can think of. People purchase insurance for boats, ATV’s, even earthquakes! The truth is that insurance on these objects and events are not likely to never be used, but people purchase it anyways. Disabilities are a common occurrence, and yet disability insurance is only purchased by a small portion of the working community. Having a source of income protection can save you from years of hardship and debt, even preventing the need to declare bankruptcy.

There are several types of disability insurance available. The most common type is a group disability policy purchased through your employer. The group plan allows for discounted premium rates, but these plans are also limited in their coverage and only pay benefits for limited amounts of time. The preferred policy is an individual disability insurance plan, which is set-up to meet the specific needs of the individual purchasing the policy. These plans often have longer benefit payment periods and will cover a higher percentage of the pre-disability income.

The type of plan that is right for you depends on a number of different things. The first is simply what you cab afford with the income you are currently making. Individual policies can have very high premiums, but the protection offered by these policies cannot be matched by even the best group disability plans. Group plans are very affordable, but the amount of your pre-disability income covered is often low and policy language often restricts the most common ailments to a limited benefit period. Also, when filing a claim, the claims examiner of an individual policy will take more of your supporting information into account and more personalized attention is paid to your claim, when group policies are often a calculated decision made on very little information.

When you are budgeting the different insurance policies you have, make sure not to overlook disability insurance. Disabilities are far more common than people realize and the chance of being struck with one is much higher than the chance of being in a earthquake or flood, for example, which are common purchases when deciding on insurance. Protect your ability to earn an income to provide peace and security for you and your family.

This guest post was written by Derick Gosman. He blogs mainly on disability claim advice and other topics in the disability insurance world.

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