Disability insurance is beneficial for many working-age adults. However, some may struggle to determine which policy is best for their individual needs. Regardless, it’s critical to understand what disability insurance covers and how much coverage you may need before choosing a policy. Here are some tips on how to find the best disability insurance for your unique circumstances.
What Does Disability Insurance Cover?
Before looking for the best disability insurance, it’s important to know exactly what these policies include. Most of them provide coverage in case you become disabled due to an illness or injury that prevents you from working. The exact details of this coverage vary from policy to policy, so make sure to read all the specifics carefully before signing up.
Like workers’ compensation, disability insurance is a form of income insurance. It’s generally provides a portion of your income if you can’t work due to an injury or illness. Policy benefits are often used to cover expenses such as medical bills and the cost of living during recovery.
Types of Disability Insurance
There are two main types of disability insurance: short term and long term. Short-term disability insurance typically pays out benefits for a maximum period of about 2 years, while long-term disability insurance may last until the end of a policyholder’s life.
Both types of policies typically have waiting periods before their coverage technically begins. For example, if you sign up for a policy with a 90-day waiting period and become disabled shortly after enrolling, then you won’t receive benefits until after 90 days. While this rarely creates issues, it’s important to keep in mind when shopping for a policy.
Determine Your Coverage Needs
The next step in finding the right disability insurance is determining how much coverage you need. This depends on several factors, including your income level and other assets you have available in case of an emergency. It’s essential to account for all sources of income when calculating your coverage needs so you don’t end up underinsured. If your employer provides any form of income insurance, then make sure to factor that into your calculations, as well.
When shopping around for the best disability insurance policy, it’s also essential to consider all coverage options available to you before deciding which ones you need. For instance, some plans may offer additional coverage such as partial or total permanent disability protection, accident protection, or critical illness protection, among others. Knowing which options are best suited to your needs will ensure you get the most out of your individual policy.
Compare Policies and Prices
Once you know which kind of coverage is right for you, it’s time to start comparing prices and policies from different providers. We always recommend working with an independent insurance agent who can source quotes from several different companies. Many providers also offer discounts if you purchase multiple policies or bundle them together with health or life insurance.
Calculate Your Benefit Amount
The amount of money you’ll receive in disability benefits is usually calculated as a percentage of your income before the onset of your disability. However, most policies limit the maximum amount they pay out per month. If you get a raise or earn more than their stated limit, then your benefit amount may be reduced accordingly.
Some policies may also exclude certain types of income from their calculations such as bonuses or commissions. This can further reduce the amount of benefits paid out following a claim. It’s important to understand all the details about how your benefits will be calculated before signing up for any policy.
Choose the Best Disability Insurance Policy
Finding the best disability insurance by yourself isn’t always easy, but it’s worth taking the time to do it right. Get started by learning which type of coverage is included in each policy and how much coverage you may need. Then, calculate your benefit amount and consider working with an independent insurance agent to get quotes for similar policies.
We can help you find the best disability insurance for your unique needs. Whether you’re looking for short-term or long-term coverage, simply give us a call or contact us online to explore your options today.