Disability Insurance Is Needed For Financial Security, But There Are Ways To Save On This Need

Disability insurance can cover many different types of benefits, and it is important to evaluate your needs carefully to make sure that your policy covers the benefits you want without costing more than necessary. One benefit is called income loss or income replacement. This benefit will pay up to the specified percentage of any income lost due to a covered disability. This ensures that if you must take a different job with lower pay because of a disability covered under the disability insurance policy, the insurance will cover the difference between the previous and current income. This policy coverage will cost more than a policy which does not include lost income replacement. Many disability insurance policies do contain some type of replacement income coverage.

Check your disability insurance policy for a rehabilitation clause, also known as a return to work clause. This states that the disability insurance company will pay for any necessary services, training, and workplace modifications so that you can return to work, whether it is at your previous occupation or a new one. Normally this coverage does not cost more, because it allows the insurer to keep their costs down by getting you back to work much sooner, thereby saving money on benefits. It is possible to get disability insurance that has a COLA included, which is a cost of living adjustment to account for inflation and the increased cost of living. This coverage will cause your disability insurance premium to be higher though, so you need to determine whether you can afford this coverage within your insurance budget or if you need the savings instead. Check your policy to ensure that there is a provision covering any recurrent disability, otherwise you may end up having to wait the elimination period of your disability insurance policy twice for the same disability. Most insurance providers have policies which do not require another elimination period if you suffer a relapse of the disability within a certain time period of returning to work, normally within six months.

Determine whether you need mental health or substance abuse coverage, because these may cost more in disability insurance rates. This component offers coverage for a disability which occurs as the result of a mental illness or substance abuse, and many times this coverage may come with a longer elimination period than other benefits under the policy. Prices for this coverage to be included in your disability insurance policy can be high, and may not make this coverage type financially advisable. There are two coverage types that you can choose from regarding the premiums on your disability insurance, and these are guaranteed renewable and non-cancellable. The difference between these two have to do with whether the premiums can be raised for coverage or not. With guaranteed renewal, your premiums may go up if the class you are assigned to has a cost increase, but with non-cancellable disability insurance your premiums can never be raised. Under both types, you must pay your premiums for the guarantee to be in effect. A guaranteed renewable policy will cost less, and give you fabulous savings.