Benefits of Private Disability Policy

The risk of disability is more apparent than real. The consequences can be life-altering for those involved. For most people, being disabled threatens their ability to earn a living. Disability can stop income and impose additional burden. When disability occurs, the problem begins.

In most cases, protection from disability is available through Social Security Disability Insurance (SDDI) or workers compensation. However, these safety net programs are limited and too often non-existent. Moreover, SSDI’s definition of “disability” makes one difficult to qualify.  For those who qualify, SSDI is not sufficient to maintain an adequate standard of living.

Private Disability Insurance Benefits

In these hard times, public benefits are not enough. One must learn to procure private disability benefits.

Contrary to common belief, accidents do not cause many of the disabling injuries. According to the U.S. Group Disability Rate and Risk Management Survey, 90 percent of disability is the result of illness. Diseases of the musculoskeletal system, circulatory system, connective tissue and various forms of cancer are among the leading causes of disability.

Moreover, people often neglect to protect themselves from the risk of disability because they give higher priority to other insurance needs. The risk of disability is as great as or greater than that of life and health that people commonly obtain.

According to the findings of National Association of Insurance Commissioners, about 25 percent chance that a 35-year old individual will be disabled for at least 90 days or longer. In short, one of four workers will be out of work for at least 90 days.

Advantages of Procuring Private Disability Insurance

Acquiring a private insurance is beneficial because:

1. In case of disability, the benefits will be tax-free provided that the insurance premiums are paid with after-tax money.
2. The policy will not be fixed to the current job.
3. It locks to one’s exceptional income level. Thus, a highly skilled or highly paid employee may procure a more expensive class of policy known as own-occupation coverage or any-occupation coverage. Any-occupational policies are more common and less expensive requiring a lower-paying job with no insurance payments to make up for any lost income.

Factors to Consider in Private Disability Insurance

In looking for private disability insurance, you may want to consider the following:

1. The policy must be non-cancellable which means that the policy may not be changed as long as premiums are paid on time.
2. The policy must be non-cancellable up to the age of 65.
3. Avoid buying “accident-only” policy.
4. Be sure that policy has residual benefits.
5. Be careful with clauses excluding pre-existing medical conditions or dangerous hobbies.

If you are interested in procuring a private insurance policy, confer with a disability insurance lawyer to know more about private insurance benefits.