Overview Of Disability Insurance
If an incident occurs when you are not able to work for a certain period of time, your medical and other expenses will be reimbursed if you have a disability insurance cover. From that respect it can be considered a part of health insurance. However, it an independent disability cover encompasses a number of other things which may not be included in the health insurance cover.
The history of disability insurance dates backs to 1850s in the United States when Franklin Health Insurance introduced its accident insurance policy for the first time. At the onset, it was introduced only for railways and steamboat employees. Gradually other insurance companies started introducing similar policies for workers from different industry segment. These policies started covering different types of accidents and illness.
How disability insurance works
In case of disability insurance, you would get exactly the same amount that you have lost during the period in which you have not worked due to illness or some injury. Most insurance companies cover a percentage income of the insurance holder. They synchronize this amount with other disability factors like social security. Generally, these covers are tax-free.
There is a waiting period and time duration for disability insurance policies. Generally, for short-term disability insurance policies, this period is shorter. You can request for coverage for a minimum period of 7-10 days. This may extend for a maximum of 6 months. Long-term disability policies are often coordinated with social security. This is because it lasts for a much longer time.
You have to select an amount which you can afford. You can also loan the amount if it a large sum of money, however you have to pay off the loan with interest. The amount for these policies goes up with age.
Some Forms of disability insurance
There are different forms of disability insurance available for working professionals. These include business overhead insurance, disability transaction cover, wage loss replacement policy, to name a few.
Business overhead insurance - These policies help the business owner reimburse a percentage of the business expenses. In other words, if the business owner suffers from any kind of disability owing to accident, injury or illness, the policy ensures that some of his fixed expenses can still continue such as the salaries of other employees, rent of the business set up and cost of equipment and utilities.
Disability trade policy - It ensures that in case there are more than one business owners, those in good physical shape can fund the portion of the one who has become disabled. It also ensures a smooth running of business in case of illness, accident and death of any owner.
Wage Loss Replacement Plan - These are designed to help an employee in the organization who is suffering a loss of salary for not attending work, owing to any kind of accident, illness or injury.
The premium is generally higher for a policy holder is involved in a labor-intensive job. In contrary, for desk jobs, the companies charges lesser premium as the disable may work from home or in a wheelchair, for example. Nevertheless, it is essential to go for a disable insurance cover.