According to the 2009 estimate, it has been found out that at least one-third of the U.S Workers suffer from disablement at some point of time in their career. However, the Federal Agency states that 70% of the employees do not go in for the long-term disability insurance. There is the option of the Social Security disability benefits which are available to only some of the disabled workers. But, in this type of insurance the payout covers only 40 percent of the person’s income and the allowance rate which is guaranteed for the initial claims is only 30% which is quite less.
It is quite important to purchase your own disability insurance which is bound to pay you off in the long run. When you are considering the additional paycheck protection, there are certain factors which need to be taken in to consideration.
1) Short and the long-term options: The short term disability is usually the sick leave and this is the recorded time of absence from work when you are ill or have been injured or just after the birth of your child. There are 47% of U.S employees who tend to offer short-term coverage while there are the other 40% who offer long-term disability. Before you go in to buy disability insurance, you should know to understand the benefits out of the same.
- It's important to know the role of insurance company. So understand the short-term coverage provided by your company so that you will have a clear-cut idea as to what you need to look for in your long-term policy. You need to understand the ‘elimination period’ which is the time taken from the disablement to the actual time when you start receiving the benefits.
- Most of the long-term policies last for a specific number of years or till the time you reach your retirement. You should also understand if you can keep coverage even after you leave your employer, which is referred to as portability.
2) Your coverage limit: You should understand the percentage of coverage you will need for your disability insurance. Group plans are great but most of these plans just cover the base salary and nothing more. Age, health status and employment are the main factors that determine the premium on your insurance plan so you must understand these factors before you purchase your policy.
3) It is always important to read through the fine print which will contain all the terms and conditions regarding the policy.
Also you can seek guidance of Your Personal Financial Mentor at http://kscripts.com in order to get a suitable disability insurance plan keeping in mind your financial requirements.