Once someone is considered disabled unfortunately it is too late for disability insurance, potentially leaving the person with a big problem. Disability insurance is a type of insurance in which one’s income is replaced (about 45-60 percent) in the unfortunate event that illness or sickness does not allow the person to fulfill his or her occupation.
To begin, make sure that you know the particular companies exact definition of total disability. Always make sure you understand any and all language before agreeing to or signing anything.
There are three general types: true own-occupation, modified own-occupation and gainful occupation.
True Own-Occupation Disability Insurance
This type of disability coverage means generally that if an injury or illness prevents the person in question from being able to do their job successfully than that person would be thought to be completely disabled, regardless of the fact that a person decides to get some type of employment they can still do.
Modified Own-Occupation
This type of disability coverage policy differs greatly from the first in one main respect. While with the previous type the person could still do another job if they were no longer able to perform their old job due to injury or illness, this type does not allow having another job. With this type the person in question would be penalized if he or she decided that they want to go back to work or if they decide to earn income another way while the claim is in effect.
Gainful Occupation
This type is often advised against in favor of an own-occupation policy. This type defines disability as inability to perform the responsibilities of your job due to sickness or injury, and you are not able to perform the duties of any other job in which you have qualification for.
Policies vary by company and can be incredibly different from company to company. When shopping for credit disability life insurance, make sure to shop around before deciding on a policy. Because of the difference in policy from company to company, finding the right rate can be tricky. Credit disability life insurance is not something in which the lowest rate is the best deal. As with many things, the cheaper the contract often the cheaper the service you will receive from the contract.
Keep in mind that credit disability life insurance is often more expensive than regular credit life insurance. When deciding if you should get disability insurance there are many factors to consider. One should begin by trying to figure if they would be able to afford their life and all their expenses if they were to become disabled.
Also think about the loans you have to pay. This insurance is so that these payments will carry on in the event of illness or injury. If one has a large amount in loan payment they may want to consider a disability policy because in the event something does happen then the person will have a hard time paying medical expenses in addition to regular daily expenses without even considering loan payments. Yet with the insurance the company will pay the loan payments for the amount of time the client is disabled.
By Lauren Culliton