An Overview of Disability Insurance:

Have you made plans in the event that you become disabled and are unable to meet your current financial obligations? If not, now is a great time to plan ahead and start looking into your disability insurance options. If you are the sole-income provider for your family, or if you would be unable to pay your bills in the event that you could not work, disability insurance can truly be a lifesaver.

No one likes to consider the prospect that they may be temporarily or permanently disabled. However, you cannot rely solely on Medicare or Social Security to provide for your needs and the needs of your family should this occur.

Disability insurance is commonly referred to as income replacement insurance. A disability insurance policy will provide supplemental income if you are injured, sick or unable to work due to a medical condition, accident or other circumstance. While your policy may not cover 100% of your current income level, something is definitely better than nothing when faced with a disability.

There are several factors that you will need to consider while searching for a disability insurance policy.

1. Is the policy for long-term or short-term coverage? The length of time that your insurance policy will provide income replacement will be defined as short-term or long-term. A short-term policy will only replace your income loss due to a disability for a set period of time.

2. How does the policy define disability? The term disability may not be defined in the same way by different companies. You will need to make sure that your definition of disability is the same as the definition used by the insurance company to ensure that you will be able to make ends meet.

3. How much of your income will be replaced? Many policies use a percentage of your current income for supplementation. Before selecting a policy, make sure that this percentage will be enough to pay your bills and keep your life intact.

4. How long will you need to wait before the policy is active? Disability insurance will commonly have a waiting period before you will be able to make a claim. This waiting period may be as little as six months, or in some cases, even longer.

5. Will the policy affect your ability to qualify for Social Security? It is important to check ahead of time to make sure that your benefits will not prevent you from qualifying for Social Security or Medicare.

6. How reputable is the issuing company? You may need to research the insurance company to make sure that you are paying your premiums to a company that will provide you benefits when you need them. In the past, many insurance companies have gone under, leaving their policy holders high and dry.

7. What are your renewal options? Will you be able to renew your existing policy without having to undergo another physical exam? Are there any limitations in your ability to renew your current policy? These are questions that you will need to answer before purchasing a disability insurance policy.

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