Many people take care to provide adequate life insurance for their families in the event of an untimely death. Unfortunately, far fewer add to the proper protection for their families by considering the appropriate disability insurance coverage. When one loses the ability to work and generate an income, it is often a financial catastrophe. This is especially true since the fact is that there is a 25 percent chance of dealing with long-term disability during your career.
Insurance providers have developed two types of disability products for you to consider. The first, short-term disability, often works in conjunction with employer benefits to cover benefits for a period of weeks to a few months. Depending on the type of coverage purchased, this package of benefits will make up a large part or all of your normal compensation.
On the other hand, long-term disability is designed to kick in after your other benefits and short-term coverage ends. Because it lasts longer and has a different purpose, there are a number of options for the type and cost of insurance you may choose.
Disability insurance is basically designed to either replace your income if you can no longer perform your primary job or if you are unable to work at all. For example, a surgeon who loses his hand might have a policy to replace his primary income, even if he is able to work as a medical consultant or in some other capacity.
The primary advantage of covering a disability is it provides a way to maintain your lifestyle if you are incapacitated for any reason covered by your policy. The cost of coverage will run one to three percent of your annual salary, depending on how much of your total income you desire to cover. Another major factor in determining the cost of coverage is your occupation and the degree of risk it involves.
In most cases, short-term insurance is only available through an employer, unless you are self-employed. While some companies also provide for all or part of the cost of long-term disability coverage, it is available to almost anyone, even if purchased on your own.