Disability insurance is an insurance product designed to provide you with 40 – 60% of your gross income in the event you become sick or develop an illness that affects your ability to earn an income. The difference in policies are great, having a basic knowledge of the terms, types and payment methods are very important aspects you should understand and consider when selecting disability insurance. Because of the enormous differences between policies and companies it is important that your selection of coverage not be based solely on price. Instead you should develop an idea of your needs based on your life style and measure those needs against the options and benefits of each insurance provider.
One of the first things you should review and understand when selecting a disability insurance policy is the insurer’s definition of disability. This is important because it varies between insurers and products and is one of the most important things to understand. The definition tells you in what situations the insurer will pay the benefit, and to whom it will be paid in the event you become disabled. The following will list some types of disability insurance and also provides some of the key phrases used for various types of policies.
Every disability insurance policy from any insurance company can be very different. If you just buy the lowest price it could be like throwing your money out the window. You need to know the differences between an inexpensive disability policy with solid benefits and one that makes it very unlikely to pay benefits at all.
Own-Occupation Disability Insurance
The inability to perform the material and substantial duties of your regular occupation, the insurance company will consider your occupation to be the occupation you are engaged in at the time you become disabled, they will pay the claim even if you are working in some other capacity. If you cannot perform the duties necessary to stay in your field of expertise, can you continue to work in a different occupation without losing your benefits?
Income Replacement Insurance
Many insurance carriers have switched to these types of disability insurance policies. Sickness or injury results in your inability to perform the material and substantial duties of your occupation and are not engaged in any other occupation. Does this sound fair?
Gainful Occupation Coverage
This type of disability insurance is very common amongst employer/group policies. These types of policies leave much of the decision making up to the actual insurance company. How uncomfortable is that. Because of sickness or injury you are unable to perform the material and substantial duties or your occupation, or any occupation for which you are deemed reasonably qualified by education, training.
