Disability insurance is considered by experts to be just as valuable as life or health insurance, perhaps even more so. It is however, frequently overlooked, even though the protection disability insurance provides is for two of your most valuable assets: your ability to work, and your income.
If you were to become suddenly ill or injured and unable to work, how would you provide for yourself, your family, and pay for living expenses? Chances are, you would not be able to without an income to be received from your job. With disability insurance, you are provided with a percentage of the monthly income you would be making if you were able to work. This monthly benefit should, ideally, allow you to maintain your living standard and still provide for your family. Because nearly everyone must work in order to provide for themselves, their families, and pay for living expenses, it is suggested that every person obtain disability insurance.
There are two types of disability insurance you may choose to obtain:
Short-Term Disability
This type of disability is frequently provided by an employer. When an individual becomes injured or ill and is covered by short-term disability, they receive an income during the early period of their injury. Depending on the insurance provider, the individual may receive disability benefits for 2 weeks or up to 2 years.
Long-Term Disability
Long-term disability may be offered by an employer or purchased separately by an individual. This type of disability replaces income during an extended period of time, normally for 2 years, 5 years, or until the disabled recipient turns 65.
Long-term disability insurance is the type most often sought by consumers because it provides the most coverage and the most policy options.
There are two types of long-term disability insurance policies that dictate how renewable your disability policy contract is. Renewable, when spoken in context with disability insurance, means how subject to change your policy is. There are two types of long-term renewable disability policies: guaranteed renewable and non-cancelable.
A guaranteed renewable disability policy is a type of policy which the insurance company cannot cancel, but reserves the right to raise the premiums of, but only if it affects a group or class of policy holders.
A non-cancelable insurance policy is characterized in these ways:
– Premiums cannot be raised as long as they are being paid;
– The policy cannot be cancelled as long as the premiums are being paid.
Although both of these policy types are advantageous, a non-cancelable policy offers the best coverage and is the type experts most highly recommend you obtain.
Non-cancelable disability polices are considered more advantageous than guaranteed renewable policies because no changes are allowed to be made to them, unless you personally wish any changes to be made. Your premium and options are locked in and cannot be changed, and the policy can not be cancelled.
However, with value of a non-cancelable disability insurance policy is reflected in its price. A non-cancelable policy will cost much more than a guaranteed-renewable policy.
When seeking to obtain a non-cancelable disability insurance policy, speak with your insurance agent or provider. They will be able to provide you with valuable input and suggestions on the coverage a non-cancelable disability insurance policy can provide. Their information may also help you be able to decide whether or not a non-cancelable policy is the coverage you need, or if you would be satisfied with a guaranteed renewable policy. Just remember, your insurance company does not have the power to change any details locked into a non-cancelable policy. Only you have the ability to do that.