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How Does Disability Insurance Work


Disability of any type hinders our ability to work and earn our own living. However, not every thing is lost if somebody becomes disabled. The financial crisis arising out of disability can be handled with the help of disability insurance. Here is how you can go about it.

How to Obtain Disability Insurance?
The formal method to obtain disability insurance begins with the process of filing an application. Check out local listings for an insurance agent who also deals in disability insurance. In consultation with him/her fill an application form to obtain disability insurance. Forward it to the insurance firm concerned and wait for a word from the company.

Disability Insurance Policy Terms: The most important aspect of terms and conditions of disability insurance is the definition of disability. While there would be some varying specific points in all policies, there is one common point amongst all of them- whether a person is rendered incapable of doing his/her own professional work or has he/she been rendered incapable of doing all types of work. The first is technically known as "Own Occ" while the latter is known as "Any Occ". In terms of premium to be paid, the first one is more expensive.

  Mode of Payment of Disability Insurance
Quite unlike other insurance policies, you are not paid a lump sum amount as a disability insurance cover. Instead, you usually get a fixed amount, typically paid every month. The amount you'll get and the time-span for which you will receive it would vary from policy to policy.

Note: There is one thing that you need to note. You can not obtain a disability insurance in which your monthly payment exceeds the salary that you get as a regular employee. However, variables such as inflation and other increments can be incorporated into your monthly handouts.

When to Get a Disability Insurance Policy: Obtaining a disability insurance policy should ideally be done before-hand. If you are in a profession in which you work more with your body parts then it is best to opt for a disability insurance policy at the start of your employment. A policy in force at the time of becoming disabled can help you immensely.

How to Collect Disability Insurance Amount
If a person has a valid, in-force disability insurance then he/she needs to file a claim for it at the time of becoming disabled. The claim would then be taken up by the company and verified with the terms and conditions of the policy and the extent of disability. Once all this is verified, monthly payments from the policy would be subsequently started and would continue till the person returns to work.