The Importance of Disability Insurance
Disability insurance is a kind of policy that is designed to protect and sustain income should a policyholder become critically ill or injured and, as a result, be unable to work for a certain length of time. It has coverage for injury to any part of your physical body, including such critical components as eyesight, limbs and hands, hearing and even for mental illness.
Just about all can benefit from this kind of policy protection. This is true due to sobering fact that anyone can be injured or fall sick at any time, which has the possible effect of making one unable to perform his or her employment duties. This kind of coverage is often provided to owners of their own businesses, the self-employed, employees and even those who presently are unemployed.
How it functions
Payout levels will vary depending on the choices of coverage. Each policy is renewable annually. Should one become sick or hurt and, as a result, be unable to work, then the policyholder simply files a claim for financial compensation from the insurance provider. The extended payouts will continue until one is once again ready to resume normal work duties.
Kinds of coverage
There are generally two kinds of disability insurance policies: Short-Term Disability (STD) and Long-Term Disability (LTD). STD policies usually have 14-day waiting periods 14 days with a maximum period of benefits being paid out no longer than two years. LTD policies will normally have a waiting period of a few weeks up to several months. The maximum benefit period for this coverage will generally range from three years up to remainder of one’s lifetime.