Disability Life Insurance
Disability can at times be more dangerous than death. A person who is disabled will stop earning while he will have additional medical expenses apart from the regular day to day expenses. Even though no one would want to be disabled, it is always better that we are prepared for all uncertainties.
In order to avoid any mental agony along with our physical disability, it is very important that we are covered with a disability insurance, that provides cash coverage to US citizens in case of a disability caused due to injury or sickness or both.
The premium is determined on the occupation, age, sex and risk involved at work. If the chances of accidents at your work place are less, then the premium would also be less. Generally it would cost between $1000 to $1500.
Before we decide on disability life insurance, the following points need to be understood clearly.
1. Criteria for Disability
Some policies consider a person to be disabled only if he is not in a position to perform any job while some other policies considers a person as disabled if he is not able to perform the duties of his occupation or expertise.
The latter policy is preferable as you would get the benefits for not being able to perform the duties of your occupation even though there may be other jobs which you would still be able to perform.
2. The tenure of the benefits
The tenure of disability life insurance depends on the type of policy, though they are usually available till you attain the age of 65. The types of policies are:
The Short term disability policy will have a maximum benefit period of about 2 years. Also note that the policy will take about 2 weeks time to get activated.
The Long term disability policy will have a benefit period ranging from a few years to a lifetime. This policy may take a few weeks to a few months to get activated.
While selecting a policy, please note that you have an option of selecting a cancelable or a non-cancelable policy. Even though the premium for a non-cancelable policy may be slightly high, it is still advantageous as the insurance company cannot cancel these policies.
Moreover, these policies may be renewed without any increase in the premium amount.
3. Amount that would be paid as benefit.
The amount payable is usually determined by the risk that is involved in ones occupation. Generally the amount payable would not exceed 66% of the total income which is almost equal to what one gets at work after deductions in tax.
The following factors can help you in deriving maximum benefit from the US Disability Insurance.
The “Catch up Rider Insurance” gives cash coverage for loss incurred by a business during the disability. The amount would be paid to you after you recover.
The Guaranteed Future Additional Insurance will help you in buying new insurance without having to prove your health conditions.
Cost of Living Adjustment (COLA) will ensure that the benefits that you get are insulated from inflation and other volatilities in the stock market.
Some of the Insurance Companies that offers disability life insurance are:
Guardian Disability Insurance
Palmer Insurance Agency
American Life, Health & Disability Insurance
Berkshire Life Insurance Company of America