What Are the Different Types of Disability Insurance?

1. Long-Term Disability Insurance Policy

This type of disability insurance policy offers robust coverage when you become disabled due to any unfortunate incident. A long-term disability insurance plan usually offers lifetime coverage.

Additionally, you can receive money from this policy every month, which is a perfect substitute for your lost income. However, the waiting period can range from a few weeks to months.

2. Short-Term Disability Insurance Policy

The maximum duration of this type of policy is two years. However, they have a waiting period of up to 14 days only.

Apart from this, you can check out the eligibility criteria to ensure that you are eligible to purchase an insurance policy.

People who fulfil the following criteria are eligible for a disability insurance plan:

• Minimum age of 18 years.
• Maximum age must be 70 years.

Nonetheless, you must note that the coverage amount varies considerably with insurance providers.

A disability cover is essential for the following reasons:

• You will be able to receive weekly payouts from your insurer that can serve as an income source after your accident in case of purchasing a short-term disability plan.
• You can get premium waiver benefits from some insurers under the basic disability insurance plan. 
• You can stand eligible for tax benefits on premiums under Section 80C of the Income Tax Act.

However, there are some essential things that you should keep in mind when you are purchasing a disability insurance policy.

Below are some things that you must keep in mind while purchasing a disability insurance policy:

• Select an Appropriate Cover: It is essential that you choose an adequate amount of coverage. This ensures that you and your family do not face any financial crisis, even when you lose your job due to your disability.

• Go Through the Terms of Policy: You must go through the terms and conditions of your policy to know about its inclusions and exclusions. Accordingly, you should go forward with its purchase to ensure maximum benefit.

• Compare Different Policies Available: There are several disability insurance policies available in the market. So it is essential to compare them to ensure you select the one that appropriately serves your needs. 

• Include Necessary Riders: You can include necessary riders in your plan to extend the coverage of your policy. This ensures greater protection within the same plan, increasing the chances of claim approval.

• Check for Return of Premium Benefit: You should check if there is a return of premium benefit available on the policy. However, remember that this is available only if you raise a claim within a specific time period.

• Check for Additional Benefits: You must check out the benefits different policies offer apart from the common ones. This ensures that you select the most advantageous plan for you. 

Now that you have a clear idea about the various types of disability insurance, selecting the most appropriate one will be a breeze. Additionally, check out the inclusions and exclusions of the policy to make an informed choice.