Disability Insurance: Protecting Yourself from Accidents

Jen Jones

Everyone tries to prevent accidents in the workplace and believes in invincibility or tends to live by the belief that “an accident could never happen to me,” but unfortunately becoming disabled while working is a possibility. However, you can take steps to guarantee that if you do become disabled, you will still be able to receive a partial income in order to pay your mortgage and other living expenses through disability insurance.

Disability Insurance Basics

Disability insurance will pay an insured person a specified percentage of income when the person is unable to work due to an accident or illness. In order for the disability benefits to be paid, you must be unable to work for a specified amount of time.

There are two types of disability insurance: short term and long term. Short term disability insurance has a waiting period up to two weeks, with a maximum benefit period of up to two years. This type of disability insurance is designed to take care of temporary disabilities, and the percentage payable usually ranges from 50 to 65 percent. Long term disability insurance has a waiting period of up to several months, with a maximum benefit period ranging from a few years to the rest of your life.

Your policy contains the amount of payments, the term, and a description of disability. Disability insurance policies define what events or illnesses are covered and not covered by the policy. Before agreeing to a disability insurance policy, it is important to understand all the factors and components of the policy.

Disability Insurance Policy Factors

There are a variety of factors influencing each disability insurance policy. Be sure to find out how the insurance policy defines disability since definitions tend to change from policy to policy. Although some pay benefits if you cannot perform the duties of your occupation, others will only pay benefits if you cannot perform any job based on your education and experience. The percentage of taxable earnings replacement is also important as it should replace between 60 to 70 percent of your total earnings. If you are planning to work part-time while on disability insurance, consider a policy that pays partial benefits. Partial benefits payments will allow you to work at a part-time job while receiving benefits.

You also need to examine the length of the benefit period, or the amount of time you will be receiving the monthly benefits. Since Social Security disability coverage starts at age 65, you should find a policy with a benefit period covering up to at least age 65. Since you may not be receiving benefits for several years, you will want to make sure that the cost-of-living benefits increases. This way the amount keeps up with the inflation of the dollar and you will have a current value of the benefit payments. You should always check the financial stability of the insurer before committing to a disability insurance policy. If your insurance agent does not provide you with the financial stability information, take advantage of rating services to check their stability.

Startling Disability Insurance Statistics

Although you may think that you are healthy and in good shape, disability can happen to anyone. According to the Social Security Administration, three out of ten workers will become disabled before retiring, but only 30% of workers have long-term disability insurance. Also, over 17% of Americans are classified as disabled; that’s over 51 million people with disabilities. You also have a one in three chance that you will become disabled during the course of your career for at least six months. These disability insurance statistics are real, so be sure to take the proper precaution and consider purchasing disability insurance in the event of a workplace accident.

Mortgage Disability Insurance

Mortgage disability insurance will provide you with the funds to meet your mortgage payments for up to three years in the event you become disabled. This will help you make your payments while you are away from work so you do not run the risk of losing your home. Over 40 percent of home foreclosures are due to disability according to the Department of Housing, and you do not want to be one of the statistics. If you have mortgage disability insurance and become disabled, you need to file a claim and present evidence of your disability in order to receive the payments.

You should always protect yourself against a possible accident at work, and enrolling in a disability insurance plan is the best way to do so. Make sure you understand the policy’s terms and conditions before signing. Your chances of being disabled at work are higher than you might think, and taking out disability insurance is the best way to be prepared for the worst.



Comments:
By: Free Online Disability Insurance Quotes
Date: 2/25/2009 4:50:38 AM
There is passive info on disability insurance, anyone who is interested in learning and importance of disability insurance must read that page, keep it up buddy.

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