Disability Insurance

Some people prefer to go for long-term disability insurance provided by their employers whereas there are some employees who purchase it individually.

Individual disability insurance is a basic insurance product that is designed to replace around half of your gross income on a tax-free basis in case you suffer from illness, which prevents you from earning an income in your occupation.

Insuring for Disability is a Wise Thing

Cash benefits are payable when you cannot work because of sickness or injury. It provides compulsory temporary disability insurance for workers. A typical policy provides you with a weekly portion of your salary, usually 50, 60, or 66 2/3 percent for 13 to 26 weeks.

Disability insurance policies from different insurance companies vary. When you buy it, the most competitive rate should not be the only criterion.

Short or Long-Term Disability Insurance?

Short-term disability makes a provision for an income for the early part of a disability. A policy may pay benefits for two weeks up to two years. It is often included as part of an employee benefits package.

On the other hand, long-term disability policy helps replace income for an extended period, usually ending after five years or when the disabled person turns 65.

Benefits of Disability Insurance

You generally start receiving money from your STD policy within one to 14 days after becoming sick or disabled. The actual time for coverage to kick in depends on whether you suffer an illness or injury.

If you suffer an injury, your benefits will be paid immediately. You also may receive retroactive benefits if you have a condition that worsens over time.

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