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Disability Insurance At A Glance


Disability can approach in any form. A person can meet an accident or fall ill anywhere and anytime, thus stumbling to continue his services and career. The disability insurance is one such approach in which the insured, if becomes disabled, is provided with periodic portion of income lost. This helps the person to replace his income and continue his life, even though their world changes!

The definition of disability may vary from policy to policy and from its provider. But the basic disability insurance is of two types:

1. Short-term disability policy (STD) – This policy is mainly included in employee benefit package. The policy refers to benefit of income provided in early days of disability. This disability policy provides benefit from two weeks time period to a maximum of two years.

2. Long-term disability policy (LTD) – This policy provides insurance benefit for 1 to 5 years or till the insured attains the age of 65 years. They have some waiting period before repayment gets amassing. The long-term disability policy has two main protection features:

a) The non-cancelable policy in which the insurance company cannot refuse or cancel the policy, except in matters of failure to pay premiums in stipulated time. Another benefit of this feature is the insurance company cannot increase the premium value or exercise any change in the benefits awarded, at the time of purchase of policy.

b) In case of guarantee policy also the insurer cannot reject or cancel the policy, if premium is duly filled. But, in this feature it has the authority to increase the premium value, with the authority that it is increased similarly for all other policyholders.

Other add-on options available, while purchasing a disability insurance policy are: coordination of benefits, partial disability, return or waiver of premium, or cost of living adjustments. One can add any or all of these policies, depending on their outlook.