VIEWS: 3 PAGES: 3 POSTED ON: 1/21/2011
Disability insurance is one of the most overlooked types of insurance. People will provide insurance for their cars and their property, but they often overlook the risks of everyday life on their families. Disability insurance provides you with funds when you cannot work to help pay for your household expenditures. Why do so many people over look this type of insurance? While there is no way to know, it is often thought that people have the idea that they will not get hurt and they will be able to work as long as they would like. Unfortunately, that does not happen for many people. People become ill or are involved in accidents without any warning, which could devastate a family that is dependent on their family for financial stability. Disability insurance is often purchased as part of life insurance coverage, but can be sold separately. This is often called total and permanent disability insurance. It provides you with funds to pay for your bills should you be unable to work. There are also some disability insurance plans that provide for temporary coverage, but this may also be provided by your health provider or your worker's compensation (should you be hurt on the job). This type of temporary coverage is called income protection insurance. Coverage Under Disability Insurance: Coverage under disability insurance will range based on the policy you select to use. This type of insurance will range widely from lump sum payments to monthly payments. The payout will happen when you are unable to work. Yet, it often will take at least six months after you have been deemed to be unable to work again for the disability insurance to kick in. When getting disability insurance, be sure to consider payments that occur over your lifetime as one of the best ways to manage financial goals when you cannot work. There may be lifetime limits on this type of insurance, and there may be restrictions on what type of disability will be qualified. For example, if you are unable to work at your current position, your insurance provider may not pay out unless you cannot work in any reasonable position. Questions for Your Provider: When talking to your provider for disability insurance, there are a number of questions to ask the provider to know what your policy will and will not provide. * How do premiums change over time? Premiums for disability insurance will generally be the same throughout your life, but should be carefully considered against inflation. * When are premiums paid? Some disability insurance companies allow you to choose how often you will make payment on your disability insurance. This is usually monthly or on a fortnightly routine. * What limitations on cover are in place? The policy may have a specific amount that it will pay out as the maximum for your needs. * What types of disability qualify for a claim? These are just some of the questions you need to ask your disability insurance provider to get the best policy for you. Ways to Save on Disability Insurance: Disability insurance will range in price depending on the risks you have. For example, if you work in a position where there is more risk of you being hurt or injured severely, you may have to pay more for your insurance. You may be able to lower the amount you pay in premiums on your disability insurance by combining the cost of this policy with others. There are several other types of insurance protection that could be included with your disability insurance. The most common type is life insurance. It is also helpful to get quotes from several insurance companies to find out what the costs to you are for disability insurance. When comparing these types of insurance, be sure to compare like policies between companies. Also, lower or raise the cover amount to match your needs. While it is tempting to lower the amount you will receive at payout to get a lower payment on the insurance, this could be costly when you need to use those funds. Beware Before Signing: When it comes time to sign your disability insurance contract, read through it and understand all requirements, premiums, length of time as well as overall coverage. By law, it is required that the insurance company provide you with a thorough outline of what the policy provides. If you have questions about your policy, now is the best time to ask about it. Specifically ask about limitations, fees and inflation. Additional Coverage to Consider: There are a handful of other types of insurance you may want to consider in addition to disability insurance. Trauma and critical illness insurance is one option which will provide you with a payout should you suddenly be diagnosed of an illness or injury (of qualified options.) As mentioned, a life insurance policy is quite helpful in protecting your family from your death. Living expense insurance is also helpful as it will provide your family with daily living expenses when you are ill and will pay for daily living costs.
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