5 Myths About Disability Insurance

Tuesday, 07 Dec 2010 11:11 AM

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Disability insurance is insurance purchased to replace income in the event of a disability. Disability can affect a person’s earning potential either through job loss and loss of entire income or reduction in income.

There are many myths surrounding disabilituy insurance. The top five are:

disability insurance facts myths
 
1. Term disability insurance is expensive.
Disability insurance, be it long-term disability insurance or short-term disability insurance, is not expensive. It can cost anywhere between one to three percent of one’s income. However, in the event of disability, the disability insurance can replace the entire wages or salary and any other income earned through part-time work, as well as offer support through medical care. One should obtain disability insurance quotes and compare them to get the best rate and coverage.
 
2. Employers provide sufficient coverage for disability through group insurance.
The group insurance disability coverage offered by the employer offers up to 50% of salary replacement and disability coverage. Also, there are several criteria that need to be met and the disability proceeds are capped at a certain dollar amount and for certain weeks or months. Beyond that, the disability coverage ceases to exist. This is neither long-term disability insurance nor short-term disability insurance if certain conditions are not met. When obtaining disability quotes, one can sometimes negotiate for obtaining a reduction in premium if one gets group insurance.
 
3. Social security administration provides excellent disability insurance.
This is one of the top disability insurance myths. The disability programs of the social security administration are commendable. However, these require that the individual has made a certain amount as payment through social security taxes after which this short-term disability insurance coverage kicks in. Also, there are several requirements with respect to treatment and wages. Social security disability insurance covers only about 60% of the actual cost and one cannot rely upon social security as long-term disability insurance.
 
4. Disability insurance is only for the physically challenged.
This is another top disability insurance myth. Disability insurance covers long and short-term disability that can arise due to unexpected events such as accidents, work place injury, or illness that makes a person incapable of continuing his job, thus directly affecting the person’s income. Certain disabilities may be short lived, while others may be permanent, and the person may even need to switch to a job that can accommodate his disability. Long-term disability insurance or short-term disability insurance kicks in if and when a person suffers disability. A disability insurance quote can be obtained in order to better understand the cost and coverage details.
 
5. Disability insurance should be bought after one becomes disabled.
Disability insurance must be bought when a person is healthy and not disabled in order to get the best coverage with a minimal cost. One can obtain disability insurance quotes and compare them for the coverage details before purchasing disability insurance.

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