Disability Insurance

Disability insurance is a valuable tool that helps to replace part of a person’s income when they are unable to work due to a serious illness or injury. An individual with this type of insurance is protected from the risk of some event interfering with their ability to perform the key components of their job, even when the disability occurs at home.

The need for this insurance depends on an individual’s skill set, income and ability to replace income lost due to an injury or illness. The more dependent someone is upon their income, the more they should consider purchasing insurance to protect it. Someone involved in a line of work that puts them at higher risk for injury, whether from machinery or repetitive motions, may benefit from this type of protection.

When a person with disability protection is unable to perform key duties of their job due to illness or injury, the policy will come into effect. The terms of the contract will define how soon the insured person will start receiving payments to replace the lost income. The policy will also determine whether payments come in weekly, bi-monthly, or monthly installments and how long the payments will continue.

Insurance policies vary as to whether they are for short or long-term disability, pay a fixed sum over a given period or indefinitely and how payments are made. Premiums will depend on the type and length of benefits provided by the policy. Individual insurance policies are helpful when an employer does not provide disability benefits or when a person is self-employed. Companies may also purchase policies to provide disability benefits for their employees or to protect their company from financial hardship in the event that a key employee is unable to perform work functions.

The biggest benefit of protecting oneself from disability is having funds to pay for day-to-day expenses. Regardless of whether the disability occurred at work or at home, the policy is valid. Income from a disability policy can also be combined with other income resources without impacting the benefit amount.