Disability insurance is something everyone should have, yet some employers simply don’t offer this important kind of coverage that takes care of you financially in the event you become disabled. Privately purchased disability insurance isn’t cheap, but if you ever need it, its definitely worth the initial outlay. Even if your employer does offer disability coverage, make sure it provides adequate coverage. If it doesn’t you can ask your employer to upgrade to a higher level of coverage, with you paying the difference. If they don’t provide coverage at all, begin to research the popular health and life insurance coverage companies.
Buying private disability insurance does provide some advantages over an employer’s disability. Probably the best advantage is that you can carry your disability insurance anywhere you go, including if you choose to be self-employed. Also, private disability benefits are provided to you tax free, giving you a bit more income than if you had used employer’s insurance. Finally, if you have a specialty or premium skill such as a surgeon, you can choose to purchase disability insurance that provides a comparable income level if you should find yourself disabled.
When shopping for disability insurance, there are several things you should keep in mind. Make sure you won’t find yourself without coverage by making sure the policy you choose states that it is non-cancellable. Choosing this type of policy also locks in your premium at a set cost. Most non-cancellable policies will cover you up to the age of 65, but check before you sign into the policy. Also avoid policies that only provide accident coverage or limited term coverage. these kinds of coverage are simply too specific to provide you with peace of mind.
Gap benefit coverage, also known as residual coverage is also important. Just as with health insurance gap coverage, residual coverage fills the gap in your salary during employment and the salary you will receive on disability. This will keep you and your family from scrambling to adjust expenditures in the event of disability, allowing them and you, to focus on your health. Similarly, you can add a rider to your policy that will maintain your disability benefits at the cost of inflation. Otherwise, you will only receive a disability benefit equal to the salary you received when you signed the policy.
Disability insurance can be purchased through almost any of the major insurance carriers. The costs vary widely, so its a good idea to shop around and ask questions before deciding on a carrier. Keep in mind, just as with other types of insurance, there will be a certain amount of time you will have to wait before receiving your disability payments after you have applied. This is a good reason to always have at least a few months of salary saved, so that the waiting period doesn’t leave you with unpaid bills.