Disability Insurance Explained

Disability insurance is a line of insurance that provides reimbursement for the beneficiary's inability to earn because of a temporary or permanent injury or sickness. The insurance plan would pay for your monthly bills and other financial dealings that might get disrupted due to loss in income as a result of some injury or illness. In the current era, many companies and organizations provide their employees with disability insurance policies.

The Two Major Types of Disability Insurances

STD (Short Term Disability) and LTD (Long Term Disability) insurances are the two major kinds of insurances that you can apply for. Under STDs you get coverage for not more than 6 months. On the other hand LTD provides you financial protection for over a year. STDs come into picture in case of illness or injury that might keep you out of work for a short span of time. An STD effectively replaces around 45-60% of your gross income on a tax-free basis. The amounts that are paid by the insurance policy generally equate to a state's unemployment payment.

Long term illness or injuries are not very common and the insurance companies have a lot to gain by offering these insurance policies at various rates. The qualifying period is around 6 months and the beneficiary must qualify for the insurance. There are certain requirements that the policy holder needs to fulfill in order to reap the benefits of the policy. Once the insurer is sure that you are actually suffering from a genuine injury that would keep you away of work, you would easily be able to use the policy to your benefit.

Social Security Disability Insurance

In order to qualify for this genre of insurance you need to be employed for at least 5 out of the last 10 years. If any kind of damage to your body or mind keeps you out of work, you have the option of using this policy. According to the federal Social Security Disability Act, this policy falls under LTD. Similarly Supplemental Security Income program is a program funded by the general revenues of the Federal Treasury and comes in handy for the aged and the disabled.

Various kinds of disability insurance plans come with low premiums and offer great financial security to the policy holders. There are hardly any co-payments or deductibles involved and this takes out the complications that most insurance policies come with. You should make sure that you go through a number of quotes from various insurance providers before you put your finger on a particular policy. There are a large number of permutations and combinations that form different kinds of coverage packets.

There are plenty of insurance providers that run their own websites. You can get quotes from these websites over the internet and then start the tumultuous process of comparing these quotes. Comparing quotes might take a lot of time but it would help you get your hands on the best possible deal and is therefore highly recommended.