| Disability Insurance |
| Written by Helen White | |
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Disability Insurance is a form of insurance that insures individuals against their disability that could make them not eligible to work. It is a type of pay to the insured people for their living expenses when they are unable to work. The benefits for the individual would depend on the reason for disability, is it due to accident or illness and if the benefit period is longer then the premium amount would be high. There are several kinds of disability contracts that can be chosen for individual insurance. Some of these plans are made available by the employer through group health insurance and could be taken from private insurers. There are also many public sector plans and programs which include the social security and in certain states State Disability Insurance programs.
In the National social insurance program which is the single largest form of disability program that is provided by the federal government to all citizens. This version is part of the Social Security Disability Insurance that provides insurance to the society at large by the government. These are large programs with several beneficiaries and the benefit formula would not be large but would be enough to prevent an individual from poverty and stay afloat. There are several types of such disability insurance programs based on the risk factor and the probability of the employee getting disabled due the hazard involved in the work. The other type of disability insurance program is Worker’s compensation that offers payments to employees who are not able to work sue to job related injury. In workers compensation is more than the income insurance that would pay compensation for the economic loss and also for payment of medical expenses and general damages like pain and suffering. It also covers the benefits to the dependents of workers who are killed during their employment. The most important type of disability insurance is that which is given to military Veteran’s by organizations like the U.S. Department of Veterans Affairs. In this type of insurance it covers health insurance, life insurance, disability income insurance and even mortgage insurance too. The veteran while in service is injured would get the compensation from the authorities for those he/she has been insured but the scope of payment would be limited. It also covers to the dependents if the veteran on duty dies. If they are injured and are out of service they can still be covered for health and life insurance if the veteran is disable to work. The disability insurance is also available to self-employed individuals who desire disability coverage can purchase their own policies from the open market. The premium applicable to such individual will depend on the coverage the individual wishes, also based on the occupation and the kind of risk involved in the work the individual is involved in and also on the company that offers it based on State or Country. The premium for such programs would be higher based on the benefit period and the variety of other circumstances. Business owners need to compensate the employees with benefits if the employees get injured while at work or if there is an accident in the office. There are several types of business disability insurance, which are business overhead insurance that helps to pay for the reimbursement of the business expenses in case the business owner is disabled. In this program when the owner is injured and is not able to pay for the fixed expenses like the rent and utilities this would be paid by the insurance company for these expenses and the business would continue to run. In the next business related disability insurance is the buy/sell policy where if the business is involved in buying and selling of goods and if the owner dies or becomes disabled his share is funded and can be bought by other healthy owners and continue the business. The business owners could use the wage loss replacement plans to provide benefits to key employees while maximizing the tax benefits to both the employee and the employer. While making the claims for the disability insurance, there are several variables that would matter in every type of disability insurance and these are very much relevant. The claim is it made where the disability is unpredictable that is not resulting from known chronic illness of the claimant. It is disability occurred while the claimant was performing job. The claimant should also know when the first payment would commence after the disability and also know how much of money would be paid and in what period. The claimant should also know the benefits that he/she would get if he/she is not totally disabled and the disability is partial. |
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