Disability Insurance: Prepare for Injuries

The odds of suffering from an injury that prevents you from working are staggering. Thirty percent of Americans between the ages of 35 to 65 will be disabled and as a result prevented from working for an average of 90 days. When faced with these odds, many are prompted to take steps to make sure that they are prepared for an injury of such a magnitude.
 
A major injury or illness has the potential to throw anyone into serious debt through the loss of income if he/she is not prepared for such a circumstance. Are you prepared? The first step is to understand the protection you may already have.

Social Security

Social security provides disability income in addition to retirement income. However it is quite difficult to qualify for social security income and usually requires the assistance of a lawyer to gain access to funds. Social security is available to all people who work but given the difficulty in qualifying for disability funds it is not a good idea for you to count on social security as your only protection in the case of illness or injury.

Workers Compensation

Workers compensation is required by law to be provided by employers to their employees. However, this type of disability insurance is only applicable to job related illness or injury. Another drawback is the short duration and low value of the payments. Given its limitations, workers compensation isn't a form of disability insurance that will provide sufficient coverage in the case of a debilitating incident.

Individual Policies

If your goal is to protect yourself and your loved ones in the event of an injury or illness that prevents you from working, an individual disability insurance policy is the safest and most comprehensive route. The types of individual polices offered vary and when shopping for a policy it is a wise idea to keep several variables in mind. Look for a policy that will provide the highest monthly payments for which you qualify.
 
When purchasing a disability insurance policy, you will need to consider the degree to which you want to be covered. Two options are "own occupation" and "any occupation." A policy with "own occupation" coverage, guaranteed for life, allows you to do part-time work in another field while still collecting disability payments.
 
The other option in disability insurance is "any occupation" coverage. This type of coverage will only be effective when you are unable to do work of any kind and therefore does not provide the best coverage.
 
A third important variable is the period of time between the disabling injury or illness and time that payments will begin. Policies with longer waiting periods will be more cost effective to you in the long run.
 
The last variable to consider is the length of the benefit period. You should choose the longest benefit period that is offered to you by the insurance company. This variable is the most important and should be considered first when choosing a disability insurance policy.

Disability Insurance Companies

After considering these variables it is also advisable to examine and compare the insurance companies offering the disability insurance. Research the financial solidity of the insurance company, to make sure they will be capable of paying your entire insurance claim. Also, make sure the company offers a non-cancelable contract that will guarantee your rates and benefits without having to negotiate a renewable policy.