Disability insurance is an important tool that every employee should make use of. It is an insurance policy that secures and provides protection for the workers who become disabled in the discharge of their duties or otherwise.
The reasons for disability could be many such as prolonged illness or accidents. As per the terms and conditions of the policy, relief will be provided to the worker, when he has to live without pay and allowances from his employer.
Now, a person can buy a short term or a long term disability policy as per his needs. The range of short terms policies is generally two years, where for long terms policies, it is for longer periods, sometimes extending up to insurer’s full life.
There are many types of policies, as regards benefits and payment of premium. Policies provide many options, but for every additional benefit, additional premium need to be paid. Here is a list of benefits you may look for when purchasing the policy:
Purchases of additional coverage.
Cost of living adjustments (COLA).
Coordination of benefits with other policies.
Residual or partial disability rider permitting a return to part-time work with reduced benefit payments.
Return of premium after a specified period with no claims.
Waiver of premium payment after a specified period of disability.
Premium for disability insurance are based on many characteristics like age, occupation, health and the calculations of potential lost income. Occupation is very important, because some occupations by their very nature are more hazardous than the other.
The whole purpose of disability insurance is to provide the benefit to the insurer. Therefore while buying any insurance policy take written explanation from the insurance company where ever necessary and keep your file up to date.
Some times long-term disability insurance is provided by the employers. It is a part of terms and conditions of working in these companies. But you can purchase long term insurance on your own as well. In that case, it is tax-free.
Instead of life insurance it is better to buy disability insurance. The coverage provided by the later policy is much more than life insurance. Accidents do happen and in case you are disabled and not in a position to do any productive work, disability insurance is your only protection.
You can get a number of quotes online from your broker and compare the benefits. As for the standing of the insurance company, your broker’s advice might carry weight, but your independent verification is a must. Because you will get the benefits, if the company exists, or the financial standing of the company is such that it would settle the claims speedily.
