Disability Insurance Tip Center
Tips on Disability Insurance - Policy Types, Residual Disability, and More
When you're comparing different options for disability insurance, be on the lookout for the areas where policies are likely to differ. Don't assume that terms are defined in the same way from one policy to another. Pay close attention to the exact manner key policy terms are described. That's the only way you can be sure you truly understand the terms and conditions of each policy option.
- Total Disability: Some policies use an "own occupation" definition of total disability, while others use an "any occupation" definition. The best policies use the own occupation definition, which means you'll be considered totally disabled if you're unable to continue working in your actual occupation. If your policy uses the "any occupation definition" unlike the "own occupation" definition, earnings from another occupation may offset your insurance benefit.
Elimination Period: You can choose (when you start a policy) to have elimination periods (time before benefits start) as short as one month all the way to a year before becoming eligible for benefits. The longer the wait, the less expensive the cost of the policy.
Make sure you know how long you'll have to wait for benefits to be payable. You cannot choose (when you start a policy) to have elimination periods (time before benefits start) as short as one month all the way to a year before becoming eligible for benefits. The longer the wait, the less expensive the cost of the policy.
Residual Benefit: Pay attention to whether or not your policy's residual benefit rider continues to pay only until you are able to return to your usual work schedule and duties or if you'll keep receiving benefits until your income returns to 80% of the level it was prior to the disability.
It's a good idea to look for a policy that pays residual disability benefits. However, don't assume that residual benefits are all the same. Before you purchase a disability policy, find out whether it uses a time and duty definition or an income definition of residual benefits.
- Time and Duty Definition: Some policies pay residual benefits until an individual is able to return to his full work and duty schedule. This means that you'll still receive a percentage of your disability benefits when you return to work part time. Your benefits will continue until you go back to your pre-disability work hours, performing the same job functions you were responsible for before experiencing medical problems. This option may be fine for individuals who work in hourly wage jobs, but often is not sufficient for professionals, commissioned sales people, entrepreneurs, and others whose earnings are performance based.
- Income Definition: If your earnings aren't specifically based on how many hours you work each day or week, you're better off with a policy that offers an income protection benefit. For example, if you own and operate a service-oriented business or sell a product that has a long sales cycle, it can take a long time for you to build your earnings back up to the level they were before you became unable to work. You could be working a full time schedule, performing your usual duties, for months – or even longer – before your income fully bounces back from the time you had to spend away from the job. If your disability plan uses the income definition, you'll keep receiving proportional benefits until your earnings return to the level they were before your bout with a disability.
Do you have all the relevant facts you need to make a wise decision about disability insurance? Many people assume they have all the information necessary to make up their minds regarding their disability insurance needs, but this isn't always the case. Don't wait until you're facing a long term disability to learn what "they" don't tell you about disability insurance.
Six Misconceptions About Disability Insurance:
Misconception #1: It's not difficult to qualify for social security disability benefits. Fact: Fewer than 35% of the people who apply for social security disability benefits are approved.
Misconception #2: Everyone who works qualifies for social security benefits following a disability. Fact: In order to be eligible for disability benefits, you must have worked at least 10 years in a job in which you paid into the social security system.
Misconception #3: Social security provides sufficient disability coverage. Fact: The average social security disability benefit, for those who are approved, is $722 per month.
Misconception #4: Employer-paid group disability policies are preferable to individual policies. Fact: There are many drawbacks associated with employer-paid disability insurance, including the facts that coverage can be lost upon separation from employment and benefits received are taxable as income.
Misconception #5: All long-term disability insurance policies are essentially the same. Fact: There are many significant differences among disability insurance policies, including the waiting period, length of benefits, and how disability is defined.
Misconception #6: Disability insurance isn't as important as life insurance. Fact: While life insurance is quite important, it's not accurate to say that it matters more than disability coverage. It’s a fact that a 42-year-old adult is four times more likely to experience a disability during his or her working years than to die during the same time frame.
Do you have some questions about disability insurance that you'd like answered? Do you wish you could get the information you need in an easy to understand format at a time that's convenient for you? Sometimes it's a lot easier to learn the facts from watching a video rather than reading company literature or speaking to an insurance agent.
You can learn all about disability insurance without having to invest a lot of time or energy simply by viewing the educational disability insurance videos available on www.ProtectYourIncome.com. You'll find a broad selection of informative videos on the site, including ones that provide details about disability insurance in general, as well as those that focus on coverage for professionals in specific occupations.
Some disability insurance policies pay benefits only in the event of a total disability. While a total disability is certainly devastating, partial disabilities can also result in a significant reduction in income. It's a fact that your ability to earn a living can be seriously curtailed, temporarily or permanently, in the event of a partial disability. That's why the best disability insurance policies include a provision for residual disability benefits.
When you want to make sure that you won't end up in a financial bind as a result of a sickness or accident, choosing a policy that includes residual disability protection is the only logical choice. If you have a disability policy that doesn't include residual disability, the only way you'll receive benefits is if you become completely disabled. Insure yourself for all the possibilities: Total disability, partial disability and the partial disability one experiences when recovering.
If your policy includes residual disability coverage, and you experience a partial disability, you'll receive benefits in an amount proportional to the extent of your disability. For the best protection, choose a policy that includes income protection rather than loss of time and duties. That way, you'll continue to receive benefits until your income returns to the level it was prior to your disability.
The decision to take out a disability policy is an important investment in protecting your family's financial future. When you're shopping for disability insurance coverage, it's important to make sure you understand the features that separate the best policies from those that aren't likely to provide sufficient protection for your needs.
Educate Yourself About Disability Insurance
Make sure you find out all the relevant facts about disability insurance policies you are considering, including:
- Elimination Period: Choose wisely. You can pick (when you purchase) how long you'll have to wait for benefits to be payable. Elimination periods range from as short as one month all the way to 1 year before becoming eligible for benefits. The most common waiting period (called elimination period) is 90 days.
- Length of Benefits: Make sure you understand how long you'll receive benefits following the onset of a disability. Some policies provide benefits for only a few years, while others include lifetime payments.
- Integration of Benefits: Make sure to determine if your disability insurance benefits will be reduced if you are approved for social security disability.
- Customer Service: Find out how to contact someone about disability insurance claims and questions. You don't want to find yourself in need of assistance without any way to get the help you need from your insurer.
Shopping for a long-term disability insurance policy can seem overwhelming, particularly if you aren't sure what features are the most desirable and you don't know which insurance companies are the most sound. It can be hard to know where to start when you're trying to figure out how to contact someone about disability insurance protection for your income.
When you're searching online, you're likely to come across several sites promising to tell you all about disability insurance only to find out that their primary focus is to sell one particular company's policies to you.
When you want to learn the facts about disability insurance, it's best to look for an unbiased resource that can provide you with the information you need along with quotes from the leading disability insurance companies. For example, when you visit www.ProtectYourIncome.com, you'll have access to an extensive online disability insurance education center featuring disability insurance videos, articles and other information that can help you make the best choices for your personal situation along with quoting the leading companies.
When you're looking at long-term disability insurance coverage, one of the decisions you'll have to make is whether or not to include a residual disability benefit rider on your policy. Adding this feature to your policy will add a little bit to the monthly premium payment but the advantages of including this type of protection in your policy far outweigh the nominal premium increase you'll see.
The reason that a residual disability rider is such an important part of any long term disability policy lies with the fact that not every disability is permanent or total. If your disability insurance policy doesn’t include a residual benefit rider, you'll stop receiving any benefits once your physician clears you to return to work following a disabling illness or injury.
When your policy does include a residual rider, however, you'll be able to continue receiving benefits for a longer period of time. Depending on the terms of your specific rider, the policy will pay benefits in proportion to your level of disability either until you're able to return to your full work schedule and normal duties or until your income returns to the level it was before you became disabled.
Getting the information you need about disability insurance doesn't have to be a labor-intensive process. It's not necessary to spend hours on the telephone speaking with insurance agents, and you don't have to fill out numerous application forms to find out what types of rates and coverage you qualify for. You can learn all about disability insurance simply by visiting www.ProtectYourIncome.com and taking advantage of the many free resources available on the site.
Learn the Facts About Disability Insurance
You'll find a wealth of informative resources on the site, including a wide selection of interesting and informative disability insurance videos, articles, statistics, and more. Instead of having to spend hours trying to figure out how to contact someone about disability insurance, you'll find that everything you need is at your fingertips.
Get Disability Insurance Quotes
You can get quotes from all the top disability insurance companies simply by completing a brief, secure online form. It'll only take a few minutes to provide the necessary information, and you'll receive quotes from the best insurers with policies that meet your needs.