Disability Insurance

Individual Disability Insurance

Disability insurance is a type of plan that gives account holders periodic payouts as they can no longer work because of their disability. If the insured individual is disabled or has a severe illness that prevents him or her from earning a monthly salary, then this type of insurance will grant the policyholder up to 65 percent of the gross income, depending on what the policy term states. The amount of money received is also usually tax-free, which should help pay for the insured basic life expenses.

Group Disability Insurance

For professionals or employees who have dependents, disability insurance is worth purchasing. The same holds with any individual who may not have a family but hopes to maintain a comfortable lifestyle despite an accident resulting in severe illness or disability. Even employees may consider getting this type of insurance even if their employer provides them with disability coverage since the level of coverage may not suffice for their needs.

Long-Term Care

Should you suffer from a catastrophic and debilitating injury, disease, or depression that prevents you from making money from your job, then long-term disability insurance works best for this type of situation. Generally, the policy lasts 5 to 10 years, although some policies go on until the insured is 65 years of age. If your short-term disability policy has already ended, and there appears to be no improvement to your condition after suffering from a severe injury or illness, then a long-term disability policy should cover your financial concerns.

However, keep in mind that in addition to the payouts from short-term or long-term disability policies, you can receive money from other sources, depending on the cause of your injury. If you incurred injury due to an accident at the workplace, you might qualify for legal compensation, as your employer is liable for such a mishap. In case you were involved in a vehicular accident that resulted in an injury or disability, you could get coverage from your auto insurance or the other driver responsible for this situation.

Remember, though, that you need to review your insurance policy. Depending on the insurance company, account holders may receive payouts from their short- or long-term disability insurance policies while obtaining income from auto insurance, legal compensation, or other sources with or without penalties.

Types of Disability Insurance

Short-Term

If the illness or injury incurred by the account holder only lasts for a few days or weeks, then this type of disability insurance is applicable for this scenario. In this case, a percentage of the lost salary is covered if the insured cannot work for more than a few days due to the injury. The payment is given to the policyholder once the available sick leave has been used.

During the first few weeks of receiving payments, the amount of money given to the insured is almost as much as he or she usually receives every payday. However, the payout goes down to as much as 60 percent during the succeeding payments. The coverage depends on the policy, but the standard scope is six months. Since there is a limited number of payments (as it is only for short-term disability), the insured runs the risk of worrying about further sources of income in case full recovery has not been achieved once payouts have ended.

Long-Term

3 Reasons to Consider Long-Term Care (LTC) Coverage

  1. Family –The last thing most people want is to become a burden to their family.

  2. Home –Most people prefer to get the care they need in the comfort of their own homes.

  3. Nest Egg – People don’t want to risk spending the assets they’ve worked a lifetime to accumulate to pay for LTC services.

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USA
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