In case of acquired disability or sudden illness, available disability insurance benefits give you confidence about the future and a sense of security as far as your finances are concerned.
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What Is Disability Insurance?
Disability insurance has been developed to protect its insurance holder in case one is unable to work. When something unexpected happens, the insurance provider provides the policyholder with a certain amount of EBT (earnings before taxes) that an insurance holder must receive if one is unable to work.
For example, an insured party that makes 5,000 USD a month and understands that he/she will be unable to work for the next eight weeks. Since he/she is insured for 50% of his/her income in the case of an accident, he/she will be receiving a monthly benefit of 2,500 USD until he/she recovers and can work.
Types of Disability Policy
There are long-term and short-term disability policies. These policies differ in how and when one may use the policy:
- Short-term disability insurance. This type of policy encompasses only those impairments that do not last longer than two years. Such policies usually have a waiting period of zero until fourteen days before the insurance party receives his/her benefit.
The most widespread short-term disability claims comprise pregnancy, musculoskeletal system diseases, and injuries that include muscle strains, fractures, and sprains. Therefore, if you experience any injury, feel free to take full advantage of short-term disability.
- Long-term disability insurance. Such insurance is designed for individuals with a permanent impairment that can last from cradle to grave. Long-term certificate of insurance is featured with a waiting period of several weeks or even months until the policy comes into force. The most prevalent reasons for long-term disability are cancer, musculoskeletal disorders, circulatory diseases, and mental illnesses.
Insurance Policy Protection Features
The same as other benefits, disability insurance is fairly and properly customizable depending on your reasonable claims. There are two important moments about disability insurance that you need to focus on: Non-cancelable and Ensured renewable.
- Non-cancelable. This protection feature guarantees that the policy is not subject to cancelation by the insurance provider except the moment when the policyholder fails to pay a premium. In general, it means that an insured party has the right to renew his/her policy every year with the same (and not higher) amount of premium without a reduction in benefits.
- Ensured renewable. It allows all policyholders to renew their policies with the same benefits. In addition, they know that their policies will not be canceled.
The importance and necessity of disability insurance are clear. Observing the rising expenses of medical care and the increase in chronic diseases, disability insurance has become one of the top-priority types of insurance you can purchase. If you suffer from a long-term disease that makes you unable to work, it is an excellent way to protect yourself.
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