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Disability Insurance

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Accidents can happen anytime anywhere. It could be at your home, on road or at the workplace.  In many cases, the victim has to suffer temporary disability or long term disability and the individual is unable to come back to the normal life. The medicines needed and the special care needed in such cases is expensive and only disability insurance can save a person from getting into financial disaster.

If one has the disability insurance then the person could have the financial protection when an accident or illness causes the disability and the person is unable to earn any income. The disability insurance can replace about two-third of the income if the person is unable to work as a result of injury or illness. The benefits are paid on the monthly basis and are tax-free, if the plans are set up properly. There are differences in the policy depending on how soon one can get the benefits and for how long they can get that.

There is variation in the policies depending on the types of disability e.g. whether the disability benefits are to be received if the insurer cannot perform the duties of his or her occupation or any job.  The disability insurance is different from the critical illness insurance and life insurances as in these two, lump-sum money is given to the insurer whereas in case of the disability insurance the payment is done on the month basis and it continues till the person becomes 65 years old.

The policy is continued after the person gets recovered from the disability.  The benefits could be paid if there is a recurrence of the prior disability or subsequent disability occurs.  There is disability insurance that pay the insurer when the insurer is staying healthy.  If the person has never made a claim then he or she can get back the 70% of their premiums paid.

 

KINDS OF DISABILITY PLANS –

 

Short Term Disability (STD)

This coverage begins when you are unwell leave runs out. Most short term disability proposals pay a proportion of usual earnings for example, 70 per cent up to a definite time span. Normally, this can be around 15, 26 or 52 weeks. However some companies favor not to give temporary disability benefits, trusting as a substitute on Employment Insurance (EI) disability advantages.

Long Term Disability (LTD)

This insurance coverage begins when your temporary disability benefits run out. Normally, the objective is to put back 60 to 70 per cent of your regular earnings, however there is always a uppermost dollar sum (e.g., $5000 on a monthly basis). Given this, if you make high revenue, group LTD plans may reinstate below 60 to 70% of your pre-disability revenues up to the age of 70 years.