Disability Insurance: Things to Remember

Insurance, needless to say, is a very well known wordin the whole world. Not only Life insurance, Vehicle insurance,Building insurance, people today go for even body parts insurance, sayeyes or voice insurance. And talking about Disability Insurance, it isdefinitely one of the much sought after types of insurance. Thisinsurance, justifying its name, helps the policyholder to take care ofhis or her necessities when the person fails to attend work due toillness or injury. Some surveys show that one in three people becomesdisabled at the age of 35; they get disabled minimum for three monthsbefore attaining the age of 65; and one in ten may face permanentdisability. This type of coverage will, undoubtedly, solve some of yourfinancial problems such as medical and rehabilitation expenses. Generally,disability insurance is available in two kinds: short term disabilityinsurance and long term disability insurance. Long-term insurancecovers periods more than six months till the time of retirement. Noinsurance company will offer coverage of 100% of your income fearingthat you will not go back to work even after becoming fully fit.Short-term disability insurance covers 40% to 60% of the policyholdersactual income while long-term insurance will offer 75% to 80% on a tax-free basis. Therefore, it is wise to get as much coverage as possible. Either,people can go for disability insurance issued by the government or getit as insurance package provided by their employers. Mostly, theinsurance coverage provided by the employer ends at the time oftermination of ones job. Several US States are able to manage publicdisability insurance coverage policy financed by payroll taxes. Again,you have to look into several important factors while choosing adisability insurance policy. Such factors as total disability andrenewability have to be considered carefully. Choosethe policy that provides the clause that the insurance company cannotcancel or raise your premiums so that you will not be forced to cancelit. Better look for a non-cancelable policy or guaranteed renewablepolicy. With this policy you will not be singled out and the raise inpremiums could be done only with the consent of the whole class ofinsured people. Conditionally renewable policies are also welcome. Otherpolicies needed to be taken into consideration are residual insurance--for hardworking lot falling ill or getting injured; presumptiveinsurance-- protecting severely affected ones; and recurringinsurance-- for helping people who, after recovery, become disabledagain. Also, elimination as well asbenefit periods and policy exclusions ought to be keenly studied. Topromote disability insurance, various optional riders such as cost ofliving, are available. The additional clauses also comprise automaticincrease rider, social-insurance-substitute-rider andresidual-disability insurance. So, know everything about the policybefore going for it. An informed choice is always a better choice.