Long-term Disability Insurance Explained

By lornemarr, 30th Sep 2010 | Follow this author | RSS Feed | Short URL http://nut.bz/1od9dzgy/
Posted in Wikinut>Money>Insurance

Most of you know disability insurance. But do you know the difference between long term and short term?

Long term disability insurance

If you have an injury or illness and you are disabled because of it, disability insurance will take the place of the income you would have had through being employed.

When you look at this kind of insurance you will see that the group plan is broken down to long-term or short-term coverage. From the start of your disability to the 120th day is the usual plan pay-out for short-term disability insurance. If your injury is going to last longer than that, then this is where the long-term plan comes into it's own, as it covers from the 120th day until you are 65.

You do not have to take out two policies, long-term and short-term disability cover can be found on the same plan, as a result there is no break and the money continues to be paid. Disability Insurance may not be the only income you may be entitled too, check out whether you can claim one of the government benefits.

Short-term and long-term disability cover is not broken down when thinking about individual disability schemes. What these schemes do is permit the person who is purchasing insurance to choose waiver period, normally between 20 and 180 days. What this means, is that the insured customer selects when the benefit will start to pay, a period of time from the date of the injury to claiming the first payment. An individual plan further allows the insurer to decide how long the benefit will be paid out on the plan they have picked. It may be two years, five years, or maybe age 65.

If you want to buy disability insurance, it's necessary to acknowledge that where the biggest financial impact will happen, is when an individual is off work on long-term disability! If the insured is off work for 30 or 60 days, odds are he or she will be able to deal with it financially. This isn't the case if an individual is off work long term, the financial concerns of paying bills and everyday essentials can be disastrous with no income coming in.

Prepared by disability insurance Ontario experts from LSM Insurance