When choosing an individual long-term disability insurance policy, there’s much to consider. You want to get the most coverage for your money, but sometimes cutting costs on premiums can result in much higher out-of-pocket expenses in the event of a claim.
That’s why it’s essential to understand how your policy works and how it differs from others. When shopping around for a disability insurance policy, remember a few things. You’ll want to consider the monthly benefit amount and the waiting period.
Another critical factor is the waiting time. You’ll probably save some cash up front if you select a longer waiting period. But this is the time before the premiums begin to accumulate. If you don’t have other sources of support, such as a short-term disability policy, you could therefore end up paying much more. In most cases, if you need to use the policy, a shorter waiting period is more cost-effective.
What Are The Benefits of Disability Insurance?
There are many misconceptions about what qualifies as a disability. The word disability is often used to describe catastrophic conditions such as paralysis from a car accident or a debilitating stroke. However, disabilities typically result from less severe injuries and common conditions such as pregnancy, back pain, depression, and digestive disorders.
Disability Insurance gives you cash assistance after an illness or injury.
No matter what kind of disability insurance you have—short-term, long-term, supplemental, or individual—all of your plans work to safeguard your finances when you risk losing them.
It gives small business owners protection.
Disability insurance for small business owners can also help safeguard the critical areas that their absence would impact, such as:
- It may have coverage for business expenses
- Safeguard your ability to pay business loans
- Protect your firm if your business partner becomes too sick or injured to work
Income protection supports financial wellness.
In the past ten years, one in five working Americans has taken at least one leave of absence due to a condition, injury, or illness. More than 25% of 20-year-olds anticipate being unemployed each year at some point in their careers due to a disabling condition. The probability that an injury or illness will cause an interruption in income is, in fact, about the same for people of all ages, backgrounds, and occupations.
What Are The 5 Things You Need To Consider When Choosing Disability Insurance?
- Premium– Premiums differ based on the insurance company. You can lock in a premium with some policies but not with others. You can also purchase a guaranteed renewal policy or a non-cancellable policy.
- Cost of Living Benefits– It’s essential to consider how it will help you maintain financial stability. When choosing a cost of living benefit, compounding is vital. Compound interest is earned on the principal and the interest. This additional rider can help your benefits keep pace with inflation even after your disability.
- Residual Benefits– Residual benefits will help you make up your income if you can only work part-time. Residual benefits are crucial because they will help you cover the rest of your income.
- Changes in Coverage– The insurance company may change some policies during your coverage. This enables insurers to increase the cost of coverage whenever they please, whether your policy is up for renewal.
- Renewability Provision– Even if a change in your circumstances increases your risk, the insurance company cannot cancel a guaranteed renewable policy. However, the insurance provider may alter your premium even if you have a guaranteed renewable policy. Future premium payments are guaranteed with a non-cancelable policy. Non-cancellable and guaranteed renewable policies with disability benefits are the best.
Heroes Sick Pay offers an easy way to safeguard your income when you’re disabled due to surgery or illness, so you can focus on getting better instead of worrying about bills piling up back home. When you sign up for Heroes Sick Pay, we’ll ensure you receive a portion of your paycheck while you’re out of the office recuperating from surgery or taking care of yourself after an illness. Get a quote today!
