subject: What to Look For in a Disability Insurance Policy [print this page] What to Look For in a Disability Insurance Policy
If you and your family could not survive without your income, investing in a disability insurance policy should be on the top of your "to-do" list. In the same way life insurance provides a financial net in the event of your untimely death, disability insurance protects you and your family in the event you are unable to continue working due to injury or illness. Accidents and/or illnesses happen, and when they do, you need to have quality disability insurance. Like most important financial matters, it is vital that you understand the intricacies of disability insurance. This article will touch on a few helpful disability insurance pointers.
For starters, all policies define disability insurance differently. To ensure you choose the best policy, make sure your disability insurance policy includes a true Own-Occupation definition of total disability. With an own-occupation definition of total disability, you will be considered disabled if you cannot perform the major tasks of your occupation, even if you decide to work in another occupation. This protects you even if you are able to do part of your usual work. For example, a surgeon is able consult with patients, but can no longer perform surgery, because of an injury or illness. If the policy's definition of disability insurance is the inability to perform the major duties of that occupation, he/she will be covered.
The next benefit to look for when choosing between different disability insurance policies is a good Recovery (or back to work) benefit. If, due to a disability, you can work but suffer a loss of income, the Recovery benefit will pay a partial benefit. In most professions, if you are absent from your regular job for an extended period of time, it is illogical to think you will return with the same amount of income and cash flow. It will take some time to re-build a client base.
Some disability insurance plans will cover you for three months and then you are on your own. Under this type of policy, you are almost penalized for returning to work. Policies that include a strong Recovery benefit will continue to pay a percentage of the benefit based on your percentage of lost income, up to the end of the benefit period, if needed.
Finally, ensure that your disability insurance policy provider has strong financial ratings. You want the company to be around if and when you need to file a claim. Company strength should be one of the most important factors you consider in choosing a disability insurance policy.
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