Tuesday, October 24, 2006

Disability Insurance Explained

When disability strikes, your financial picture changes. No one ever thinks they are going to become "disabled," which in their minds means wheelchair bound. The reality is that 30 percent of all people 35 to 65 will suffer a disability for at least 90 days and one in seven will be disabled for five years.

There is a disability caused by a motor vehicle crash every 30 seconds.

One out of every two mortgage foreclosures is due to a disability.

With these statistics one might ponder just how long can you survive without an income? Where will the money come from and how long will that money hold out? What will happen to your dreams and priorities?

The good news is that people are living longer. The bad news is that diseases that use to cause death are now leaving people disabled. With disability on the rise, one solution is disability income. There are two types of contracts.

Non-Cancelable - premiums are guaranteed level for the life of the contract unless benefits are increased.

Guaranteed Renewable - Company reserves the right to increase premiums should they experience unfavorable claims with entire occupational class in the state of issue. For both types of contracts, coverage is never cancelled as long as premiums are paid.

Three areas of disability include occupation, compensation, and medical complications. Factors taken into consideration are gender, age, state of residence, and medical history. A wide variety of disability products are available including individual, business overhead, buy-sell, retirement, catastrophic benefit, mortgage/loan protection, self-employed, government employees, professional athletes, blue collar, and police and armed forces.

Residual or partial riders are available as well. A residual rider means if you return to work in your own or new occupation and experience a minimum 20 percent loss of income due to your disability, this rider will make up the difference. A partial rider means if you return to work on a part-time basis, after a disability, a minimum 20 percent of your benefit can still be paid.

While disability insurance is often overlooked or put on the back burner, the benefits it provides are well worth the investment and should be part of each individual's financial plan.

To receive comparison quotes on disability insurance policies from the top carriers in the country visit QuoteRetriever.com

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