Selecting The Right Disability Insurance
Even though disability insurance is gaining prominence in recent times, it is not as popular as other insurance segments. Generally, not many of us can think of the consequences that can arise when a person is absent from the workplace due to temporary disability, long-term or permanent disability, pregnancy or any other special health conditions - and therefore tend to ignore it. However, those who have availed the policy know that it is an effective way of to recover your lost income, pay medical bills and reduce financial and emotional stress if a person is suffering from some illness or injury.
There are many insurance companies offering a range of policies in it is important to understand and evaluate the various policies in great details. Thereafter, you should take a call and select the policy which suits you the best. Let us check out how you can choose the right policy for disability insurance.
Short term or long term policy
You should choose between the two types of disability insurance policies that are available in the market. The first one includes short-term disability insurance. Under this cover, you are entitled to get paid for a stipulated period of time which includes 3-6 months. This can be obtained after the disability has occurred and in case of pregnancy from the ninth month to another 3-6 months depending on the complications of the pregnancy. In this type of cover, the premiums and interest rates are much lower than long-term policies.
You can opt for a long-term disability insurance cover that offers a certain amount of money every month for a longer duration of time. It can be 3-5 years at length. Some policies also pay till 60-65 years till the age of retirement. As the duration of the cover is quite extensive, you have to pay a high rate of interest and premiums. This is what prompts most people to go for short-term insurance policy.
You should judge the pros and cons of each policy and then take the one which you think would be more profitable. While getting the short-term cover, you can apply for the long-term policy if need arises.
Group policy or individual policy
The other criterion for selecting your disability insurance cover is that whether you want to go for individual or group policy which can be either short-term or long-term. Many companies buy insurance covers for their employees and in doing so they generally opt for group insurance policies. However, if your company does not have a group policy in place you have to go for individual cover.
Sometimes, group covers do not have all the benefits an employee wants during the tenure of his disability. In that case you can buy yourself an individual cover to supplement the group insurance policy. This however needs to be done after careful scrutiny and after going through the terms and conditions.
Whether you plan to select a short-term or a long term cover or opt for either a group or individual cover, always find out the requirement, benefits, and the cost of coverage. Also the duration of the cover and the waiting period plays a very important role. Consult a lawyer who can help you in getting the right cover.