Disability insurance is designed to supplement the income of the disabled person. If you are totally disabled because of illness or injury and cannot work, disability insurance provides coverage that will give you money to cover your mortgage, rent, car payments, and other necessary expenses for life. However, finding cheap disability insurance can be tricky. The reason is that there are so many different kinds of policies and plans out there. A lot of these plans are not very affordable. So, what makes a good policy?
The answer is really more about understanding the plan than about shopping for the right policy. When you buy disability insurance, you typically get two parts. First, there is the actual policy itself, which pays benefits according to your gross monthly income as well as your disability insurance premiums. The second part of the payment is made to the people who will be paying the premiums.
As a general rule, it’s usually more affordable to buy disability insurance that covers major medical expenses. These include your hospital bills, rehabilitation, physiotherapy, and surgery expenses, as well as your prescription costs. Plus, you will need to add in your specific needs, which could include home modifications or transportation assistance, nursing home care, and disability income, if you were certified before retirement. (You must have been employed in a similar field for two years before you can become qualified.) After those factors are covered, the disability insurance will usually provide around 50% of your total expenses for necessities.
However, it’s important to understand that just because this coverage is cheaper doesn’t mean you should skimp on coverage. Many policies provide a certain amount of coverage as long as you haven’t filed bankruptcy and haven’t had any other financial problems in the past. However, sometimes things change and you become severely disabled. In this case, you might not qualify for the disability insurance coverage because of a preexisting medical condition. This means you will have to pay for the entire cost of your own rehabilitation or care, or wait until you become totally disabled before you can collect.
Some people believe that when they reach retirement age they automatically get coverage because they have paid Social Security taxes for most of their life. This isn’t necessarily true, but most people do. It is possible that the amount of coverage you are receiving now may not cover the costs you will incur after you get older. So it’s important to talk to an insurance agent about changing your coverage options if this is the case. There are many different kinds of policies available to cover these types of changes, so this shouldn’t be a problem.
Another reason that many people don’t get disability insurance coverage, because they think it’s going to be too much, is because they think it will be too expensive. While there is definitely some extra money involved, it shouldn’t be more than you can pay for in fees alone. With most policy plans you will still be required to pay some of the excess expenses, such as doctor visits and medications, but the costs of living while you are disabled will be covered.
If you are considering signing up for disability benefits, you should first discuss the pros and cons with your insurance agent. If you think you will have to change your lifestyle significantly, you may want to look into the individual disability income insurance option. The policy will be more expensive, but you will also be able to choose how much of the money you spend on disability coverage and what you are reimbursed for. There is always the option of relying on the benefits your former employer pays for to cover some of these costs, but you could end up losing out on many of the protections you were counting on.
As you can see, disability insurance isn’t something you necessarily need if you are counting on Social Security to provide you with a paycheck. If you have a serious medical condition, or if your job is on the line because of it, you are better off spending the money on an additional income stream. The additional income will help with your financial stability and provide you with peace of mind. You don’t have to worry about whether or not your disability insurance will be sufficient when you need it most. Instead, you can focus on having the best possible quality of life. There are many options available to you and they all have their own unique benefits and drawbacks, so it is best to know which options are available to you so that you can make an informed decision.