Imagine you have a significant sickness or injury, and you are unable to work for a considerable amount of time. What is your option? You are not going to get the usual salary. On top of that, you need to spend a lot of money to recover from the illness or injury. It’s tremendous economic pressure for you and your family.
That’s where disability insurance comes into the picture. It helps you to cover a portion of your lost income. Before considering disability insurance, you need to find a few things.
Assess Your Risk Factors
It would help if you had a lengthy and complete conversation with your insurance company about the potential risk you are in. You don’t want to buy unnecessary premiums for risks you don’t have. Insurance companies generally quantify risks by using several factors. So, it’s not that hard to assess the factors. If you find something confusing, ask your family and friends for a different take.
Apply Early for efficient financial planning in Scarborough
Most people don’t give much care about disability insurance when they are young and healthy. It should be quite the opposite. You don’t get to get a notice before an accident. So, you need to apply as early as possible.
Portability of the Disability Insurance
If you buy your insurance through your employer, ask if it has portability. You may want to switch your job soon if you get a better facility or for some other reasons. It would not be enjoyable for you if you have to buy different insurance.
Having portable insurance is very comforting. To make the insurance portable, you may have to spend a little more than usual. But, if it works for the rest of your life, why not?
Consider Collection Time
The collection time is significant for disability insurance. People need money as quick as possible in the time of illness. Collection time may vary from 30 days to 700 days. You need to consider the time very carefully. Some insurance policies have many lucrative offers but have lengthy collection time. So, consider what you can afford at the time of your accident or illness.
Future Increase
For many people, it is tough to assess their future income. If there is a chance of a considerable increase in your income, you need to consider it before buying the insurance. The insurance benefit is related to your income status. So, if you think you have a chance of having a substantial income in the future, it’s better to halt the purchase for a while.
Don’t Only Focus on Price
Price alone is not the criteria for the right insurance package. Whatever works for the other, may not work for you. The price should be aligned with the benefits and features of the policies.
Renewability Provision
Before purchasing the insurance, you need to sort out how long you want to be covered? People can’t always plan everything at a time. The view can change from time to time. You can’t rely on something that is fixed for good. That’s why it’s essential to check if your insurance has a renewal provision. You may want to renew your insurance in the future or adopt some other, more profitable policies.
Individual Disability Policy Vs. Employer-Sponsored Group Policy
There are two options for disability insurance- Individual disability insurance and employer-sponsored disability insurance. Employer-sponsored group policy is cheaper, but it has some drawbacks. You have to purchase new insurance if you change your job. Individual disability insurance is more expensive, but it has some specific advantages. You can keep it as long as you want. You don’t have to change it if you change your job.
Conclusion
Disability insurance offers a great deal of help. To get the best out of the insurance, you need to choose it wisely. There are two types of disability- short term disability and long term disability. Make sure that you have coverage for both of them.
Before having a plan, you need to consider its flexibility and offer. For all sorts of financial planning in Scarborough, we are here to help you. If you need information about any type of insurance like- life insurance, health insurance, travel insurance, contact us.
