Disability news stories are everywhere in the aftermath of the Covid outbreak. The coronavirus pandemic has left thousands incapacitated. Disability concerns are at their highest now, making this coverage indispensable. Disability insurance is designed to protect your income for the period you cannot work, thus the name disability income protection.
The basic function of all disability insurance policies is to replace your earnings in case you cannot earn because of an accident, illness, or injury. The Social Security Administration states that about 1 in 4 individuals aged 20 years will become disabled before they retire. These statistics are quite scary and show why disability insurance is not something that you can take lightly. It is important to get a broker agent advisor to know about the different types of coverage and find the best deal for yourself.
Factors that can affect disability coverage
Both benefits and premiums to be paid for disability insurance coverage can differ depending on certain factors. These include health history, age, gender, physical status, income, and occupation.
1. Total disability: This can be described as either “own occupation” coverage or “any occupation” coverage. The first refers to an individual unable to perform any duty full-time relating to his current occupation. For instance, a surgeon who cannot perform surgeries because of a wrist injury will be liable for “own occupation” coverage. “Any occupation” coverage refers to an individual’s right to get benefits when he cannot do any duty for which he is qualified. For instance, if a doctor, who cannot work for some reason, finds a job as a teacher in a medical school, he will get this coverage.
2. Elimination period: This is somewhat like a deductible on any major medical insurance coverage. This refers to the initial few days when the disabled policyholder cannot get benefits. This individual may have been disabled because of an injury or accident due to which he cannot work.
3. Benefit period: This refers to the maximum time period for which benefits will be given to the policyholder for a one-time instance of disability. So, the benefit period may be as less as 13 weeks or until your retirement. If the benefit period is longer, the costs of coverage will automatically be more. This is because the potential liability to the insurance provider increases when time increases. Short-term disability coverage will cover injuries for only 2 years post disability. Long-term coverage will typically provide benefits until 65 years of age. If you continue to work after 65, the benefit durations will come down.
4. Monthly indemnity: During disability, benefits that are paid are referred to as monthly indemnity. This stands for a set amount that can be paid for as long as the policyholder remains totally disabled. This is usually 60% of the policyholder’s salary and the amount will be decided based on this income.
5. Other benefits: When an individual is disabled, he can receive benefits from different sources. So, benefits under h
is disability coverage can be reduced or offset by these other income sources.
To get the best disability insurance services, it is wise to reach out to a broker advisor.