Choosing disability insurance providers may involve identifying the types of disability insurance plans offered, including eligibility requirements. Ideally, you might want to compare plans and premiums from as many different providers as possible to get a balanced view of your coverage options. Stability of the disability insurance provider is usually another important factor. You might have to draw disability payments for a number of years and will want a solvent company capable of providing the financial resources needed.
Disability insurance providers typically offer insurance plans for long-term and short-term disability insurance. Long-term disability insurance provides income protection if an injury or illness leaves you unable to work. Typically, you can receive a portion of your lost wages for several years. Coverage for short-term disability is the same, but may only provide payments for a few months.
As you look at the different plans offered by disability insurance providers, you might also take into consideration how the plans are administered. This may include eligibility requirements and how much you will receive in disability payments if you become disabled. How the provider defines a disability is another consideration in your selection. Being unable to work might not automatically qualify you for disability insurance payments.
Some disability insurance providers have plans for injury from an accident, illness, or both. If an injury or illness inhibits your ability to perform the standard duties of your job, disability payments might be allowed. If you are unable to perform standard duties of your job, but can still perform some type of job function, the provider might not consider you disabled and will deny payments.
Nearly all disability insurance providers have a waiting period from the time you become disabled to when you can begin receiving payments. This time may vary among providers and might affect your ability to meet financial obligations until payments begin. Some disability insurance providers require a 30 day waiting period, others might have a waiting period of up to 90 days.
The benefit period — which is the length of time that you can receive disability payments — may vary among disability insurance providers. Your monthly premium is subject to be higher for a long the benefit period. Typically, you may want a plan that is long enough to carry you through the recovery period of a disability.
Along with the length of time that you may collect disability payments, the insurance provider should guarantee a certain percentage of your annual earnings. Most plans offer 60 percent or slightly more of your earnings. Your monthly premium is also determined by the percentage of income you want replaced.
You may need to draw disability for several years after the effective date of the policy. The stability of the disability insurance provider might affect your ability to collect disability payments when needed. You might want to choose a disability insurance provider that is licensed by local authorities to provide coverage in your area and has a history of sound financial services.