Private Disability Income Insurance

Private disability income insurance comes into picture when a person meets with an accident or suffers from an illness that leaves him disabled for an extended period. This disability is not only physical but hampers the person from earning a decent living for himself and his family. To top it all, the person may have to cope up with added medical expenses. In order to protect a person from financial burden, disability income insurances have been designed. It pays a benefit of 50-70% of the income earned before the disability. This helps cushion the mounting expenses and supplements income till the person can resume work.

Who is Eligible for Disability Income Insurance?
Disability income insurances should be opted by every working individual. Married couples should never take a disability income lightly thinking they have their spouse's income to live on. But, one forgets, that getting by with two incomes is difficult, imagine what will happen if one of the two stops working. Single people also need it slightly more than married couples, as they will have no one to fall back for them, in case of disability.

Types of Disability Income Insurances
The thought of a wheelchair and hospital often sends shudders down one's spine. Most of the disability coverage are offered by employers and government programs. There are two types of disability income insurances. The short-term disability insurance is useful when one is temporarily unable to work. This is usually due to short-term illness or injury. The coverage is given after one has used up the entitled sick leaves. The benefits are approximate to the level of your income initially. They then gradually fall down to 60% of the income and continue for six months.

Long term disability income insurance is used to cover permanent disability. After the short-term disability insurance ends, can go on along with this insurance, for at least 5-10 years. A permanently disabled person needs to be covered under disability insurance that gives benefits till retirement.

Types of Long Term Disability Income Insurance
Long term disability income insurances are of three types based on who pays the premium. The first type is paid by the employer, the second the Social Security Administration(SSA) and lastly a private provider. Most of the employers provide short-term disability income insurances, that can replace about 60% of one's income. Also, the duration and ailments covered is also limited. The social security disability income from the SSA requires extensive medical documentation of illness or injury in order to be eligible. If it is found that the person can be employed in another job function, he or she may be disqualified from claiming social security disability. It also depends on ones contribution to the social security.

Private Disability Income Protection Insurances
If one finds that the above two disability insurances won't offer protection until retirement or the benefit is much below one's standard of living, then the private disability income protection insurances can prove to be a favorable option.

Private disability income insurances are of many types of disability income insurances like individual policies, group policies, group association policies, specialized group policies and riders attached to life insurance policies. Private disability incomes offer more comprehensive benefits than the social security benefits. Individual polices offer most coverage, although it can prove to be a bit expensive. When one is choosing an individual private disability income insurance, understand the different definitions of disability mentioned in the policy. Few polices offer benefits only if one is unable to perform the duties of a job he/she is qualified by training, experience and education. Some policies offer benefits when one is unable to perform duties of one's own occupation. Many policies provide 'own occupation' coverage for an initial period like 1 to 2 years. This policy then gets converted into 'any occupation' coverage.

Many polices waive off the disability premiums of temporarily unemployed individuals having existing disability policy till they return to work. One should be aware that the employee paid disability income benefits are taxable under the law.

The most valuable asset is one's ability to work and to be financially independent. You have to maintain your standard of living. Your family depends on your ability to earn. In today's testing times, one cannot be sure of the future, but can make the future secure by opting for disability income insurances. It is an individual choice to opt for group insurances or individual private disability income insurance. Choosing a disability income insurance is a smart move to remain secure and independent financially.