An Introduction to Disability Income Insurance:
Disability income insurance replaces one's
wage loss that can be caused if one becomes
sick or faces a serious
injury. The definition of
'inability to work' varies from provider to provider but a
medical proof that the loss in
income is caused by a disabling condition is usually accepted.
Disability income insurance is available to individuals subject to
medical underwriting. It may also be sponsored through the
employer or some other group.
Necessity of Disability Income Insurance:
One's ability to get up every morning and earn an
income is not only one of his dreams but also his most valuable asset. But uncertainty can transform this asset into a loss. A serious illness or malady can badly affect his physical or mental condition which can force him to miss out his job (and
income from that) for a few days or months or years. This can push him and his family into a disadvantage thus lowering the standard of living.
Types of Disability Income Insurance:
There are basically two types of
disability income insurance:
- Short Term Disability Income Insurance- This provides income replacement benefits for two weeks up to two years depending upon insurance providers. Short term disability income insurance coverage are available on individual as well as group basis. Group coverage can be offered directly by the employer or a professional group or an association. Individual policies are issued if the insurance seeker didn't have any medical treatment for the past 10 years. Group policies from an employer requires the person to work for the particular employer for at least ten years.
- Long Term Disability Income Insurance- This provides income replacement benefits for at least one year and can extend till five years or unless the disabled person turns 65. Long term disability income insurance available in the market are normally of two types:
- Non-Cancelable Long Term Disability Insurance- Under this policy if one pays required premium at time, then one has extra security that premiums can never be raised over and above of that shown in the policy document.
- Guaranteed Renewable Long Term Disability Insurance- The premiums under this policy can be raised only if the change affects an entire class of policy holders. So guaranteed renewable policies usually cost less than noncancelable policies in terms of premium.
Policies other than the above mentioned types are also available. These can be either a variation or a mix of these two types. Policies that replace a greater percentage of one's lost salary are more expensive.
So
disability income insurance can certainly save a
working person and his family from financial hardships in unforeseen circumstances.
For further information one may view sites like
pueblo.gsa.gov,
metlife.com,
disabilitybenefits101.org