Are
you a self-employed worker? What happens if one day you are unable to
work? Physical disabilities are more common than fatal illnesses, yet
many people maintain life insurance over disability insurance. This
guide lists some things you should know about the benefits of
disability insurance.
What
Does Disability Insurance Cover?
Disability
insurance is designed to cover your lost earning potential while
you are unable to work. Disability insurance won't cover the full
amount that you used to make, but some can cover up to 60 percent of
your regular salary. Though you may need to supplement this with
other forms of income, it can help you get on your feet.
When
you work for an employer, you have other options for disability
insurance. You may even be covered under workers compensation.
Further, an employer may still pay you when you need to have time
off.
When
you work for yourself, you're in charge of your own insurance and
coverage needs. Without disability insurance, you could find yourself
in an extremely negative financial situation if you are unable to
work.
Are
There Different Types of Disability Insurance?
There
are two primary types of disability insurance: short-term and
long-term. Short-term insurance will cover you for a period of about
2 to 5 years, depending on the policy itself. As an example, a worker
with carpal tunnel may need 3 years to recover, so their short-term
disability policy will kick in.
Long-term
disability is for those who may need to stop working for a longer
period of time. The policy may be for a set period (such as 10 years)
or may last until the person would usually retire.
Many
people get both short-term and long-term disability policies.
How
Do I Choose the Right Disability Insurance?
As
with any insurance policy, there are many factors involved in
selecting the right disability insurance. Every insurance company is
going to have a different policy and package; it's up to you to
figure out which is the best one for you. Some factors include:
-
The cost of the
premiums.
You'll be paying premiums monthly. Short-term policies cost less
than long-term policies, but long-term policies will give you more
coverage over time.
-
The waiting
period.
Most policies are going to have a long waiting period
before benefits can kick in. If there's a shorter waiting period,
then you'll probably pay more in your premiums.
-
The occupations
covered.
Some companies will only cover low-risk occupations. If
you're in a high-risk occupation, such as manual labor,
then you may find it more difficult to get disability coverage or it
may be expensive.
-
The guarantee.
A guaranteed policy is a policy that will continue to be renewed as
long as you continue to pay your premiums. Non-guaranteed policies
can be changed between policy renewals, potentially making them less
useful. Non-guaranteed policies can raise your rates, change
requirements, or alter the coverage you have available.
-
The
requirements.
Some policies require that you not be able to work at all to
pay out, while others pay out if you simply can't complete
your current job anymore. It's better to pay for the
latter type of policy. Policies that have restrictive requirements
can argue that you can do some type of work, and can
consequently avoid paying you if you become disabled.
If
you're a self-employed individual, then disability insurance may be
important to your peace of mind. Consider what might happen if you
woke up tomorrow and were unable to work. If you don't have another
source of income, then disability insurance is exactly what you need.
Contact our team at Livings
Insurance to
get a quote today.
