Disability Insurance: Why Is It Important For Sole Earner Families?

Disability Insurance: Why Is It Important For Sole Earner Families?

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Kate Collins, 28, had a tough pregnancy the second time. After the birth of the baby, Kate was diagnosed with a slipped disca condition that severely restricts movement. According to the doctor, Kate was out of action for the next few months. To be able to get back to her normal routine later, she was advised bed rest.

In addition to restricting her movement at home, her condition has forced Kate to take a break from work, adversely impacting the affordability of her lifestyle. Now she has no choice but to dig into the money that she has been saving for her childrens education. At times like these, disability insurance could come to the rescue.

Disability insurance is useful to people who cannot earn due to a physical or mental disability. A part of their salary is paid for by disability insurance. Organizations can purchase disability cover for their employees while and individuals can buy them to pay the bills in case a disability affects with their earning. These plans are available for short-term as well as long-term disabilities.

A short-term disability is a temporary condition that keeps a person from earning for a short duration. Every individual who wants to avail of short-term disability insurance must respond to a medical questionnaire. Normally, short-term disability insurance plans are valid for 3-6 months up to 2 years. They take into consideration the base salary of the insured before the disability and pay 40-65% of that amount.

Short-term disability benefits are made available to the policy holder immediately if the disability is due to injury. However, to avail of short-term disability benefits due to illness, the plan holder might have to wait longer, as the benefits are paid after a stipulated waiting period. In some cases, before paying the insured, the plan may expect to see the insured person use up all their sick days.

As the name suggests, long-term disability insurance pays the insured person after the short-term disability insurance duration is exhausted. Long-term disability insurance plans commonly include adjustments for the changes in cost of living due to inflation. The insured person can receive benefits from such plans for a pre-determined duration or until the individual reaches the retirement age.

In terms of features, there isnt much that is different in short-term and long-term disability insurance plans. In terms of benefits, however, they are dissimilar, particularly in the way they are priced. The prices are determined depending on what the plan holder works as, what his/her nationality is, and where he/she lives.

The extent of disability insurance cover required must be decided after the policy holders lifestyle, savings, financial goals, whether income comes from multiple sources, and so on, are considered. These factors will help set the limit of the insurancesurplus would mean waste and too little would mean dearth.

About the Author:
Want to locate out far more about disability insurance, then go to Paoli Symmons's web-site on how to choose the greatest short term disability insurance for your needs.



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