Are you suffering from an injury or illness that is preventing you from doing your job? If yes, you have to ensure your income does not get interrupted. Whether you are a full-time employee or a part-time employee, disability insurance can take care of all your expenses, protect your retirement savings, including taking care of all your out-of-pocket expenses. Additionally, this insurance plan also gives you a tax-free monthly payment to help cover your expenses if an illness or injury prevents you from working. Keep in mind, the minute you resume work, the payment stops. For further information, on our various disability insurance policies, please do not hesitate to reach out to our team today.
How does a disability insurance plan work?
This insurance policy is a contract between the policy owner and the insurer. The insurer agrees to pay the insured a monthly benefit instead of paying premiums in the event you become disabled and can't earn a salary. The aim of a disability insurance policy is simple – to cover your monthly income when you are unable to work due to an illness or injury. It also helps you to buy groceries, pay your medical bills, and take care of any other necessary expenses.
What does a disability insurance plan cover?
A disability insurance policy covers injuries and illnesses that restrict your ability to carry out your occupation. As simple as this insurance plan may sound, most individuals are unsure as to what counts as disability and what doesn't. For instance, one may assume that a person can get disabled with an injury to the body, like a fracture, etc. But, have you asked yourself, what about mental illness? Can we consider depression as a disability? If you are unsure, then let us reassure you. The answer is yes. The most common cause of long-term disability in the country is mental illness. We just wanted to point out that the definition of a disability is much broader than you might think. Below-mentioned is some of the medical conditions that prevent an individual from working:
Various types of disability insurance
There are two types of disability insurance plans:
Short-term disability insurance
If you have suffered an injury or illness that requires you to take a couple of weeks off from work, the best plan is a short-term disability insurance policy. It pays a certain percentage of your pre-disabled salary – which is between 60 – 80% to help cover your expenses for that period. Most short-term disability insurance plans provide disability coverage for a couple of months. However, some plans can provide benefits for up to two years. The elimination period is usually less than two weeks.
Long-term disability insurance
Unlike the short-term plan, a long-term disability insurance policy provides a consistent source of income to help pay off any bills, and cover expenses during the time you are recovering from the illness or injury. Even though you can purchase long-term disability insurance for yourself, it is usually less costly if you avail the services of a professional like InsLyf.
For more details on the various disability insurance plan, contact a member of our team today to request a free estimate.
What is the cost of a disability insurance plan?
The cost of a disability insurance policy is between 1 – 3% of an individual's income. However, it depends on several factors such as:
Age of the insured
The major factor that impacts one's disability insurance premium is the date of birth. Younger individuals are far less likely to become disabled than older adults. And, because of that, insurance companies reward them with lower premiums.
While it is scientifically proven that women live much longer than men, they also tend to file more disability claims, and it can be expensive. For this sole reason, women pay a much higher rate for disability insurance.
When you decide to apply for disability insurance, the insurer will take a look at your past and current medical history. Since fewer people are likely to suffer from a severe illness, they can qualify for better rates. Additionally, if you have a better salary, your premiums will be higher.
The work you undertake can affect your disability insurance premiums. The more dangerous your job, the higher the insurance premiums. So, a person working with heavy equipment will have to shell out for more disability coverage than an IT employee working at a desk job.
If you know someone that relies on your income due to an illness or injury, then the best decision is to get disability insurance. The risk of suffering is far greater than you think. For most individuals taking time off work can have serious financial connotations, and can cause financial hardship.
Get in touch with a member of our team today to schedule an appointment by calling us at +1 905 901 1717. We will be more than happy to explain the various policies and their benefits in detail.