Insurance Blog

All about Private Disability Insurance

When somebody is injured or can't work due to some other form of disability how do they pay their bills? If you are not working, you are not earning and the burden of your expenses won't just go away. That is why private disability insurance was created. Private disability insurance will pay a benefit of 50 to 70 percent of a person's income that was earned before the disability occurred. This will help the person be able to make ends meet until they are able to go back to work.

While some may think they do not need it, everyone should consider it. Married couples may think that they simply do not need it because they will always have each other to rely on. But as hard as it is to get by these days on two incomes, imagine the burden of only one. To that end it is even more important that single people look into the coverage as they only have themselves to rely on. What would you do if you lost all of your income in the blink of an eye?

When you think about disability insurance it is important to note that there are different kinds. First off there is short-term disability insurance which will cover you if you are injured or disabled for a short amount of time, usually up to six months. These benefits typically start at your whole income and work their way down to 60 percent.

Then there is long-term disability insurance which is designed for exactly what it sounds like; the long-term. This type of insurance will pay benefits anywhere from a period of 5 years to 10 years unless otherwise ended by a provision such as age.

There are actually three types of long-term disability insurance coverages and the type depends on the party footing the bill. There is employer paid, which is usually of a shorter duration and only covers up to 60 percent of lost income. It is also important to mention that if your employer pays for your disability insurance all benefits that are paid out to you will be taxable. Next there are Social Security benefits which can be hard to obtain and will have many rules and provisions about keeping it coming in for an extended period of time. Also, the money that you receive from Social Security will depend on how much you contributed over your working life. The last type is private long-term disability insurance and is paid for by you so you therefore dictate the coverages.

The best way to be sure that you will be covered until your retirement age is by obtaining a private disability income protection plan. This can come in many different forms such as a rider to your existing life insurance policy, as an individual policy, as a group policy, as a group association policy, or as a specialized group policy. It is important to know that policies will vary according to your needs and of course the providers themselves. Many will offer to cover you if you cannot go back and perform the exact same job as you did before you were disabled and others will not. Some will start out one way and convert to another way. The bottom line is that it pays to know what you are getting into. Before you leap into coverage you will want to explore all your available options and be sure that the plan you are going to go with will provide you and your family with everything you will need should you become disabled.

Your most valuable asset that you have to offer both yourself and your family is your ability to go out and earn a living in order to be a provider. Because of this your family is dependent on you to earn a living and if that is taken away due to a disability you will want to be sure that you are covered so that your family doesn't have to suffer any undue hardship. While it is certainly not mandatory to obtain such coverage and it will represent yet another bill to be paid, it will also bring you a very welcomed piece of mind; and that in itself can be priceless.