Knowing more about Disability Insurance

Disability insurance is simply an insurance that will cover loss earnings when the time comes that you no longer are able to work due to some disability reasons.

A wide range of disability insurance products are available in the market. And similar with long term care and life insurance, considering disability insurance also involves looking around as to which disability insurance plans or policies you think is best suitable and practical for you. Although selecting the appropriate disability insurance for you may require considerable amount of researching and consulting, it can be at the end a worthwhile effort regardless.

There are two types of disability insurance, which are 1) short-term (with two years maximum benefits) and 2) long-term disability (can be lifetime).

Before taking or committing yourself to any disability insurance, make sure that the policy allows you with a sole authority to cancel it and not by the disability insurance provider (unless you have failed in paying for your premiums). A non-cancellable disability insurance policy can assure you that the insurance provider cannot cancel your insurance or increase monthly premiums. In contrast, a guaranteed renewable disability policy cannot cancel but can increase premium rates.

Disability insurance cost depends on age, gender, type of employment, hobbies, and gender. Note that the greater the disability risk, the higher your insurance premium gets. But there are however, some ways that can help reduce disability cost. You can shorten the benefit period, perhaps making it less than the typical insurance periods (e.g., one, two, five years, and over). You have to be cautious though when you decide to use this strategy because once the disability benefit ends, you should be by then self-financing.

In addition, increasing the waiting period can be another strategy of reducing disability cost (increased waiting period before the start of benefits). The waiting periods may be from a month to several years. On the other hand, deciding to extend the waiting period may mean giving your commitment to ascertain yourself to an emergency cash fund that will cover expenses through that time.

You would most likely want to get for yourself as much insurances available in the market. This cannot be help as you of course would want to give yourself some security in the future (e.g., potential need to long term care, health and medical care, life, disability). You may decide on getting one or two, but what if you realize that you need another? A more important question would be, which among these insurances would you solely pick or include in your list to keep?

It is surprising though how most people prefer committing themselves for instance, in life insurance, over disability insurance despite the fact that there is definitely a higher risk for disability than deceasing at an early age. Events that may cause you disability can really be uncertain. You will never know what can happen, where, and when. And so, disability insurance can be useful and later be rewarding.