Disability Insurance
If you are injured or ill and are out of action for an extended period of time, then disability insurance is intended to make up a percentage of your income. Also known as income protection insurance, disability insurance varies in a great degree with some of the cheaper policies only covering you for a period of five years and better quality insurers making sure you are looked after until retirement age. Either way, if you become disabled, that will greatly impact your potential for income and disability insurance is your best way of staying solvent during this time.
Who needs disability insurance?
If you are not financial independent or able to maintain an income in the event of disability or long term illness then you should consider disability insurance. As disability insurance replaces your income can you afford not to pay for this disability insurance premium? There is no requirement by law to have this type of insurance but given the large number of issues that could arise without this insurance it is definitely an investment worth considering.
What typically does a disability insurance policy cover?
Disability insurance typically pays an income stream to you in the event of disability or long term illness. Disability is a broad term and covers a host of afflictions that would cause you to stop working. For the exact list of conditions that you are covered for, check with your potential insurer.
Most policies cover terms from 5 years up to retirement age. The payment level you receive is purely down to the premium you pay. The higher the premium, the higher the payment. Some insurers even include complementary health sessions as part of their package to assist your recovery. Insurers are beginning to offer more and more with disability insurance as they know the sooner you get fit and well, the sooner they can stop paying.
What typically does a disability insurance policy not cover?
A standard disability insurance will not cover disability or illness to a blue-collar worker. Blue collar workers are in a higher risk group so wont be covered by a basic policy. Normally, blue collar workers will have to pay a much higher premium to have the same kind of cover as a white collar worker.
Additional insurance products that policy holders might need in this area
Health insurance is crucial for the wellbeing of each and every person. Healthcare is getting increasingly expensive and without health insurance you can be broke, or worse still, unable to get the medical treatment you require in a timely fashion. Disability insurance normally takes time to establish as it is normally means-tested. Health insurance should fill the gap between your first diagnosis and your first disability insurance payment.
Additional coverage for a disability insurance policy
Disability insurance has two main variables, the length of cover and the percentage of income paid to you. Additional coverage amounts to the percentage of income you would like covered which generally has a top limit of 65%, and length of cover can reach to retirement age. By getting the full amount of coverage, your premiums will invariably go up.
What will disability insurance typically cost?
Disability insurance plans differ massively between insurers. Shopping for the most competitive rate available will end up costing you more money in the long run as your payout may only last a year.
Where Can I find Disability Insurers?
You can find a wide selection of Disability Insurance brokers and agents at www.disabilityinsurance.net.au
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