How Disability Insurance Differs From Health Insurance
 by: Gray Rollins

When faced with the option of whether to purchase disability insurance, many consumers say no without fully understanding the consequences of their decision. The major reason why so few people opt for a smart amount of disability insurance is that disability insurance policies are not as widely held or as commonly discussed as life or health insurance policies. This leads to the current situation, where many people remain uneducated as to the possible benefits that disability insurance can offer them.

Disability insurance works within a fairly simple framework. In the event you become disabled in some way and cannot do the job that you are trained for and accomplished in, your insurance will pay you some amount of tax-free replacement income. Disabilities come in many shapes and forms, and anything from vertigo to obesity to any other condition that interferes with your ability to work can potentially make it possible for you to file a disability insurance claim.

To many people, disability is a word that brings to mind hospitals and medical costs. To be certain, you may require a substantial level of care in order to recover from the injury or illness that has made it impossible to work, and having good health insurance is an important part of making it through this kind of situation with your bank account still in the black. However, it is all too easy to forget about the fact that if you find yourself in this situation, medical costs are just one piece of the financial pie. If you cannot work because of a health condition, trying to keep your home, car, and other assets can be a serious struggle without the assistance that a disability insurance claim can offer. The exact amount of money you will receive as income replacement varies depending on the kind of policy that you have, but most people who have disability insurance are insured for roughly half of their normal gross income. This kind of helping hand during the difficult period of recovery after an injury or illness can mean the difference between being able to make ends meet or falling deeply into debt.

Although few people enjoy planning for a worst case scenario, spending some time figuring out how you could financially weather becoming disabled may lead you to put some important plans into place. This kind of forethought can help make a difficult period much more bearable. Many people find that knowing they are prepared for the worst helps them enjoy more carefree times; so consider taking out disability insurance for your peace of mind as well as for its other benefits.

This article was posted on April 14, 2006