Disability Insurance, also known as disability income security, is a type of insurance that covers the financial risk that an impairment creates a physical barrier for the fulfillment of basic employment activities. It serves to replace lost earnings and provide for the financial needs of the policyholder’s dependents. Insurance premiums are paid to the Insurance Company on a monthly basis, with adjustments based on the age of the policyholder and the disability in question. In some cases, there are additional benefits offered specifically to people with disabilities that are projected to increase the lifetime earning capacity of the person insured. Disability Insurance provides the policyholder with protection from loss of earning capacity.
There are two types of disability insurance. “Social Security Disability Insurance” (SSDI) is provided by the Social Security Administration, Federal Benefits Programs, through the State departments, and is the commonest source of disability insurance coverage for disabled workers. Medicare also provides coverage for disability insurance. Disability Insurance follows the normal lines of health insurance coverage discussed above. The disability insurance carrier, either an individual group or family, assumes the risk of disability for the policyholder and provides coverage for wages lost while the policyholder is unable to work. The disability insurance carrier makes payments to the policyholder’s dependents in case of disability and death, or the worker if the worker has no dependents Doctors disability insurance.
The need for disability insurance coverage is determined by an economic assessment of a person’s potential ability to earn a living by taking advantage of State programs designed to assist handicapped individuals and their families. This assessment is based on the potential for future earning, job performance, and survival. Based on this analysis, an insurance provider determines the cost of the program, which it regards as the premium it will charge for its program. The disability insurance definition includes a list of disability conditions, which are detailed in the insurance provider’s brochure.
A qualified applicant who is under the age of 18 years must provide his/her social security number. A qualified applicant who is self-employed must provide the business records of the applicant and provide proof that he/she is not a dependent of another person. Also required is proof of financial incapacity as defined by the policy. Another condition required for disability insurance eligibility is that the applicant must be insured under COBRA.
Disability insurance companies offer different benefit packages to suit different customers’ needs. Some disability insurance companies have the option of paying monthly benefits to the policyholder while some allow the policyholder to choose the method in which the monthly benefit amount is calculated. Some disability insurance companies offer the option to make the payments automatically while others require the policyholder to choose the method of payment.
Disability insurance is a type of insurance designed to provide security for people who have a disabling physical illness or impairment that prevents them from working. Disability insurance works on two premises. Firstly, it provides safety cover for the policyholders against loss of income that results due to disability and secondly, it provides support and monetary help for the policyholders to enable them to resume their employment. Disability insurance companies calculate the monthly benefit amount on the basis of income of the policyholder. Hence, the more income the policyholder has, the greater is the amount that would be paid monthly.