Top 5 Types of Disability Insurance You Should Consider

When planning for the future, disability insurance is a tool individuals should look into; there are five main types of disability insurance: short-term disability insurance, long-term disability insurance, individual disability insurance, group disability insurance, and Social Security Disability

Disability insurance is a financial tool that cushions the fall when something unexpected happens and the disabled is no longer able to work. This type of insurance provides an economic safety net for the disabled individuals and offers a reassuring certainty that disabled people will be able to maintain their standard of living and take care of financial obligations even when they can no longer draw regular income. It is important to understand five main types of disability insurance when making an informed decision regarding which one to choose.

The first type of disability insurance is short-term disability insurance. This type of insurance helps to replace lost income for a time period that does not exceed six months, sometimes even less time. Short-term coverage is designed to take the pressure of the financial burden and ease a person into recovery from an injury, outpatient surgery or other short-term medical problems. Short-term disability insurance gives a disabled individual income for the first part of his or her disability while focusing on recovery. Most disability insurance carriers offer waiting periods that range from 0 to 14 days of disability.

The second type of insurance is long-term insurance. This type of insurance covers long periods of time, perhaps up to retirement. Long-term insurance coverage is dramatically different from short-term coverage because the total benefit amount for a short-term plan is often limited to between three and six month, while benefits from a long-term insurance policy can last for a much longer extended amount of time.

Individual disability insurance is the third type of insurance to choose from.

Unlike the previous type of insurance, individual disability insurance is something that individuals purchase for themselves by going through an insurance agent or company. Individual disability insurance is for only one person and the policies that are set up are dependant on the consumer.

For those employer – employee relationships where disability insurance is included within the package, the term in use is group disability insurance. This specific type of insurance is available only to those employees who are affiliated with the company or the group responsible for writing the policies. Like individual disability insurance, these basic policies should have a rider attached to the policy that gives the policy holder the option to increase his or her amount of disability coverage as his or her income increases. The concept behind group disability plans is that they offer limited protection to those employees who are completely dependent on their paychecks without discrimination by sex, age or health condition in the coverage level available to all or most of the employees in the population and which can be increased by adding riders to basic plans, and a cap on the amount of money that an employee can be expected to receive each month on long-term disability insurance policy.

The last type of disability insurance is the Social Security Disability Insurance. This program, in which saving for the future is reality, provides benefits to disabled individuals under 65 who have paid into the Social Security system through their payroll taxes. Many times SSDI is the only source of income a disabled individual will have while trying to recover from some form of disabling condition that hindered the further performance of a job.

Disabled people should look into disability insurance when deciding what to do in the time to come, when some type of accident that leads to disability occurs. The five different types of insurances that may be contemplated while trying to make an informed decision about which type of disability insurance to choose from are as follows: short-term disability insurance, long-term disability insurance, individual disability insurance, group disability insurance, and Social Security Disability Insurance (SSDI). Each one distinguishes those that one may have a greater appeal to a specific type of individual.