What is disability insurance? In its briefest definition, disability insurance provides protection for your future income. Some disability statistics indicate as many as one-in-five to one-in-seven people will suffer a disability lasting two or more years during their working lives prior to the age of 65.
With this likelihood of disability, having disability insurance coverage becomes a very important part of your package of protection. If you are a medical or other professional, this coverage takes on even greater importance. Your current and future earnings are probably your most important asset.
There are two general categories of disability insurance:
- Short-term disability income insurance.
- Long-term disability insurance.
As their names imply, one is designed to protect you for short term, temporary injury or illness that prevents you from working. The other exists to provide you with a percentage of your regular monthly income for a covered disability that prevents you from performing the duties of your occupation over a much longer term.
Disability programs consider the causes of disability, available disability insurance statistics, disability risks, and amounts paid out for claims by the industry as a whole and various companies in particular. You’ll pay a monthly premium based on these statistics, your age, occupation, gender and the level of benefits you choose to select.
Unlike some other forms of insurance, you typically get to choose some policy components from a menu of options that will give you a good combination of protection. This wide variety of optional protection allows you, as a successful professional, to design a disability insurance program that provides you with piece of mind, budget friendly premiums, and a good income stream should you ever suffer a covered disability.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
