Disability Insurance
The main purpose of disability insurance is to to replace an individual’s income should they be unable to work as a result of either an accident or a sickness. Some form of disability insurance should be part of any responsible family’s financial planning.
There are two basic types of disability insurance. Short term disability insurance which covers you if you are unable to work for a few months. While long term disability insurance covers you if you are permanently unable to work.
Before you buy disability insurance you should check to find out how much cover you already have. There is frequently long term disability insurance included with life insurance policies and short term insurance may be included in some medical cover schemes(may be referred to as income replacement insurance).
Different disability insurance policies can very greatly in their details. Much more so than say home insurance. So when comparing disability policies, it is very important to pay attention to the fine print.
If you are an employee working a low-risk job and your company offers this type of insurance, you should have a close look at their group policy, as it may be the most cost effective option for you.
A very important consideration in picking your disability policy should be the flexibility of that policy. Some policies may increase or decrease in amount, depending on your qualifications on other factors, such as tax advantages. Individual and private disability insurance is the most flexible option to provide the most individualized plan for your financial needs and aspirations.
The complexity and importance of disability insurance is such that it might be worth having a chat with a reputable insurance broker. They can easily take care of your financial support needs and update you with recent developments, as well as give you tips on how to maximize your benefits and increase your insurance coverage.
I should also mention one other type of disability insurance namely Key Person Insurance. This type of disability insurance covers a business against loss because of the inability of a key person to work. It is especially useful for small businesses that cannot afford the loses, if a partner or key employee becomes ill.
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