Disability Insurance

When you lose the ability to work at your own occupation there is not only an elimination of income, there usually is an increase in expenses. To protect your lifestyle, disability income is a necessity. Remember, statistics show you are much more likely to be injured in an accident than to die from one. And unforeseen serious illnesses, accident or injury can lead to disability.

The key components of a disability policy are:

Monthly Benefits - The amount is determined by your current level of income. The weekly or monthly benefit amount is a percentage of your current level of income, usually 60% to 70%. And the monthly benefit can be assessed along with other forms of disability income accorded the insured. Benefits are targeted for a total towards the 60% to 70% level for a reason, the thinking is there should not be a gain in income due to a disability, the incentive should be to recover and be productive as before to regain normal levels of income. And with certain Pure Loss of Income, monthly benefits can be paid even if an insured can return to normal work patterns, but can’t do it at the 100% level.

Benefit Periods

Short Term Disability is characterized for having a benefit period of less than 2 years, but usually of a shorter duration, such as 13, 26, or 52 weeks.

Long Term Disability is characterized for benefit periods such as 2 years, 5 years, or to age 65.

Elimination Periods (Accident/Sickness) - The elimination period is numerically quoted in days such as 0/7, meaning there are 0 waiting days for eligibility from an accident and 7 waiting days for eligibility for sickness. Elimination periods can be quoted as high as 180/180, a six month waiting time for each to become eligible. Again, time and money are correlated, the less waiting periods opted for, the more the premium, conversely, the longer waiting periods command less premium.

In addition to the key components, some of the riders could be

Cost of Living –Automatically increases benefits as the Consumer Price Index increase.

Guaranteed Purchase Option (Guaranteed Insurability) – Guarantees that on specific dates or events that an insured may purchase additional benefits if income qualifies, without having to furnish proof of insurability.

Waiver of Premium – Usually in the event of a total disability. After a certain amount of time the future premiums will be waived by the insurance company.

Impairment – Preexisting conditions are eliminated for coverage, it specifically excludes a condition that otherwise would be covered.

Life Time Benefit – Based on the extension of benefits for life should the insured experience total disability before a certain age.

Non-Disability Injury – A form of medical expense coverage, it does not pay disability income but does pay towards the medical expenses of related injuries.

Hospital Confinement – Waives the elimination period if the insured is hospitalized.

The types of disability can be:

Total Disability - It usually comes down to the inability to perform any of ones normal duties. And when it comes to work, make sure and check the provisions regarding the insured's requirement to perform any duties for which they are reasonably suited by education, training, and experience, not just the normal occupation.

Partial Disability - This is due to the inability to perform one or more of the regular duties of an occupation. Usually the benefit will range at 50% and for a short benefit period.

Residual Disability - These are benefits for loss of income after the insured returns to work usually following a total disability. Qualification for the benefit is centered in the loss of overall productive power usually caused by a partial recovery from a temporary total disability.

Recurrent Disability - There is not always a predictable recovery from a disabling accident or illness. The same disability attributable to the same cause can be suffered, and usually the elimination period is not applied the second time. The benefit period will be considered as a continuous period of disability.

Presumptive Disability - Due to some severe setbacks such as loss of sight, hearing, speech, or 2 limbs that total disability can be assumed. There would be no periodic examinations requirement to prove continued disability.

Permanent Disability - This determination is made when a person loses the ability to work for the rest of their life.

Temporary Disability - Can be interpreted whether an insured continues to work at reduced levels or is unable to work at all but is expected to fully recover.

Determining the amount of disability insurance is a financial planning exercise. You must decide how much financial risk you are willing to assume should you suddenly find yourself unable to work for an extended period of time. What liquid personal financial assets can you bring into play such as cash savings, stocks and bonds, or a spouses ongoing income. And some of your personal debt may have provisions for payment should you become disabled. All of these factors come into play when determining waiting and benefit periods.

FOR A FREE DISABILITY INSURANCE QUOTE PLEASE CALL TOLL FREE 877-732-1793 OR COMPLETE OUR SECURED ON-LINE APPLICATION.

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