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What is disability insurance?
“Social Security and the Supplemental Security Income Disability program are the largest of several federal programs that provide assistance to people with disabilities. While these two programs differ in many ways, they are both administered by the Social Security Administration and only benefit individuals with disabilities. and may qualify for benefits under any program that meet the medical criteria.”
– Social Security Web site, June 2006
The Social Security Office will want to check your medical history to make sure you qualify for disability benefits. The Social Security Office is one way to get disability benefits, but in most cases these benefits will not be enough for families.
Disability insurance can be obtained through any number of insurance companies. This insurance will act as financial security if you are disabled. You will receive a percentage of your gross income from your disability insurance policy, income that will ensure your own financial security.
You do not need to go to a Social Security office to obtain a disability insurance policy, nor to receive benefits from that policy. The Social Security Disability Program is not related to any disability insurance policies you may have.
“Personal disability insurance is a really basic concept. It is an insurance product designed to replace anywhere from 45-60% of your gross income on a tax-free basis, if an illness or disease leaves you with a disability in your business. Prevents you from earning an income. Every insurance company’s disability insurance policy is very different, this is not the only product to shop for the most competitive rate. Throwing money away to buy the cheapest disability insurance policy on the market. Monthly benefit A cheap contract may be worth much less than the profit you can get from a quality contract under the constraints of paying $100,000.”
– About Disability Insurance Web Site, June 2006
types of disability insurance
Most people are familiar with two types of disability insurance: short-term disability and long-term disability. Short-term disability insurance is included as part of benefits packages with many different employers, and usually provides income during the early part of the disability. Short-term disability insurance typically provides coverage for a period of several weeks, and no longer than a two-year period.
Long-term disability, however, can last for many years. These types of policies may be included as a part of employment benefits packages, but many people purchase these disability insurance policies individually.
As far as disability insurance goes, though, there are more policies to learn about. One type of disability insurance is own business disability insurance. The definition of this policy reads:
“Inability to perform the material and substantial duties of your regular occupation, the insurance company will treat your occupation as the occupation engaged in at the time of your disability, they will pay the claim even though you may have been working in some other capacity. “
Another type of disability insurance is income replacement insurance. This is a very popular type of disability insurance, and most insurance agents are familiar with this policy. The language for this type of disability insurance is as follows:
“Because of illness or injury you are unable to perform the material and substantial duties of your business, and are not engaged in any other business.”
Common in employee benefits packages, for-profit business coverage is another popular form of disability insurance. The language here is spoken very carefully:
“by reason of illness or injury you are physically and substantially unable to perform the duties or responsibilities of your occupation, or any occupation, for which you are reasonably qualified by education, training or experience.”
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