What are the types of Disability Insurance?
Individual Insurance: If the employer does not provide this coverage, people may purchase an individual DI for themselves. Self-employed individuals often have to insure themselves against disabilities. Premiums of these policies vary considerably between different companies and occupations. The rate may also vary between different states and countries. The premium is usually higher for policies that provide payments in higher monthly amounts or for a longer period. The premiums are also higher if the payments are started more quickly after a claim is submitted. The quote may be higher if the policy defines disability in broader terms and provides coverage for a wide range of disabilities.
Key-Person Disability Insurance: It is meant to protect a company from financial crisis that may result following the loss of its key employee due to any disability. The coverage provided by this policy can be used by the company to hire a temporary employee, as a replacement to the disabled person, for a short-term. In case of long term or permanent disability, benefits can be used to manage the costs related to hiring a replacement and loss in revenue.
Business Overhead Expense Insurance: This policy covers the overhead expenses of a business, should the owner experience such a problem. The coverage of this policy includes payments of rent, business insurance premiums, utilities, mortgage payments, property tax, maintenance costs, leasing cost, accounting and billing charges, laundry charges and other regular expenses that may usually be monthly outflows.
National Social Insurance Programs: Several developed countries have this policy wherein DI is provided by the Government to all the citizens. The UK's version is a part of National Insurance program and the U.S.'s version is a Social Security Plan that includes several parts such as Social Security DI and Supplemental Security Income.
Employer-Supplied Insurance: On-the-job injury is one of the commonest causes of disabilities. This explains why the second leading form of disability insurance is that provided by employers to cover their employees. Workers' compensation (also known as workman's comp) is a common form of this plan. It offers benefits to employees who are unable to work for a short term or long term because of a job-related injury. It also includes the benefits that are payable to the dependents in case of the death of the employee. Any injury that has occurred while not on-the-job is not covered under this plan.
Variables for Disability Insurance Claim:
The coverage provided by this plan can vary depending on some of the variables that are given below. The acceptance of the claim also depends on these variables. It should be noted that not all of the variables mentioned below matter to each type of the disability insurance. However, most of these are relevant.
- Was the disability a random, unexpected event and has not resulted from a previously known chronic disease?
- Was it incurred while the activities that pertain to the job were taking place?
- What is the waiting period for claim payments to start?
- What other policies will cover claims for this event?
- How much money will be paid per week or month and what will be the period of payment?
- What happens in case the person is only partially disabled and not totally?
Conclusion
Disability is something that people do not like to think about. However, the chance that they may become disabled is probably greater than they realize. Such disabilities may create a barrier for them to carry on with the core functions of their work, resulting in loss of job or income. Covering themselves under Disability insurance may help them to secure their incomes.
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