Saving Money on Disability Insurance

Maybe you or someone you know is disabled and looking for a way to save money on disability insurance. If this is you, then there are many things to consider when looking at the different types of insurance. There are the plans that are right for you and your disability, as well as what your level and function is – (meaning which type of insurance is best suited for you – for example), and whether or not it’s going to be long or short term. Are you still going to be able to work in your career or not?

Because purchasing disability coverage/insurance is most often a more important element then getting life insurance is, you need to know the facts involved so that you can make the right decision. There are numerous insurance policies out there and knowing which ones to choose from can help clear up some of these questions for you. We’d now like to explain four of the more prevalent types of disability insurance to you.

The first one is long-term disability coverage. This is the type of insurance set up to protect you against the loss of your salary, whether it is weekly or bimonthly. The long-term disability plan usually kicks in after you’ve missed work because of a short-term disability absence or about a six-month period. The coverage plan explained here is open to you, although it is at a reduced percentage of what your normal income is, and generally is in the 80 to 90% bracket.

Our second type of disability coverage is known as short-term disability insurance. This type of insurance will protect you against your loss of salary for the 3 to 6 months period of time. Your employer will carry this plan if they have that type of insurance and it will be classified in a group policy. The coverage that you get here is designed for a short-term stoppage of income flow that will otherwise be considered a severe financial hardship for you or your family. Checking with your employer’s insurance policy will be the key for determining the percentage of income, or lost wages, that you will be able to receive.

Coming up in our third position of disability insurance is the group long-term disability coverage. The money that you will be able to save here is geared at the group dynamic. One of the sticking points that you may encounter here is; if a member in your group ceases employment with the company, then termination of coverage will occur.

Rounding out our prevalent types of disability insurance is the granddaddy of them all — the Social Security disability payment plan. This type of insurance plan is set up for individuals experiencing a life changing disability and who are otherwise not able to continue working at all. Of course, this will not come out of your insurance plan with your employer, rather from the federal level of Social Security. To be eligible for this plan will mean that you’re unable to work for least a full year. In lieu of the fact that this type of insurance doesn’t consider your lost income as a factor, it will set you up for regularly scheduled disability payments.

In order to make one of the most important decisions about disability insurance coverage, you need to be aware of the many factors involved in purchasing the right plan. Because an insurance plan is comprised of both; the nature of the plan being purchased, and the actual cost of the insurance, you need to make sure and highlight your needs with the insurance advisor. Looking at the amount of income that you will be paying out, in collaboration with your current monthly expenses, is another surefire way to determine if this plan is economical enough for you.

A critical factor for you to evaluate is the schedule in which your premium payments are made. Should I make the payment in monthly, quarterly (every three months), or if my monetary schedule allows, even annually making large insurance plan payments? The choice of course up to you, yet it is a good idea consider all of your needs accordingly. For standard term insurance policyholders, the premium payments that you will make are already on a set schedule. Keeping this in mind, payments will increase as you get older and even if your disability is one that is progressively getting worse.

What is going to be the length of the disability? Variations in plans are available to you; whether or not you need coverage for the remainder of your life, or for just a few years until you get back up on your feet again. A majority of the time, insurance policy terms will be set up for your anticipated retirement age. If this is the case for you, it is a good idea for you to include in your thoughts: a plan for your kid’s college expenses, any vacation plans you might have in store for your retirement years, and/or paying off the mortgage entirely on your house.