Income Replacement Insurance for Individuals

When it comes to disability insurance for individuals, there are two major kinds you should know about. Knowing what is good and bad about each type can make a big difference if you ever need to take advantage of the benefits they offer.

Short term disability income insurance is available immediately if you have an accident or trauma that leaves you disabled or have an illness that disables you. This kind of coverage can last a few weeks or up to a year or more. The benefits of your disability policy will control how long the benefits last. Most employers offer this kind of plan as part of their benefits package. In fact, in some areas large employers are mandated to make some sort of short term disability insurance, available to their workers.

If your place of employment short term disability income insurance, chances are you're involved in what's called an employer-sponsored policy. Insurance carriers pool people together to make the insurance more affordable for everyone. Most group policies pay out 60 percent of your salary. This figure is sometimes offset by other factors, such as worker's compensation pay or even social security.

Long term insurance for disabilities can become available after your short term coverage has been used up. Some employers do offer long term disability insurance, but usually you are on your own to find an agent and buy this type of additional coverage. Currently, no states are mandating that employers offer any long term disability coverage.

If you have your own business or if your current job does not offer any sort of income replacement insurance for individuals, you will need to do the research and go about obtaining coverage yourself. If you have a family or someone else who depends on your income, disability insurance can put your mind at ease.

Insurance (of all kinds) is something we rarely spend much time thinking about until we have an event that makes us do so, but it pays to understand what sort of disability insurance you have and make sure that you have the coverage you need. Also, you should know the amount of benefits you will be receiving should you are ever become disabled, and whether or not it's enough to pay your bills. Policies are available that can replace up to 70% of your income.

Even if your place of employment offers some sort of income replacement insurance, you are under no obligation to take it through them. In fact, many employees opt out of their place of employment's plan and purchase an individual income replacement insurance plan on their own. Although the cost will be more when you go out on your own, there are many advantages to these types of policies.

Group contracts can have payout caps, either monthly or yearly, so if you're a high wage earner you may be quite surprised by the relatively small amount you actually receive. Also, if you leave your place of employment or are laid off, your individual income replacement insurance contract will stay with you, unlike your employer's plan.

Disability income insurance for individuals is something you should really think about before you actually need the benefits. A little planning beforehand can save lots of aggravation later on.
You can get Internet rate quotes for insurance. You can also read about disability insurance for the self-employed on the author, Alston J. Balkcom's website.