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A Guide to Private Disability Insurance

A Guide to Private Disability Insurance

While many people may have some disability insurance available to them through their employer, there are plenty of reasons to consider private disability insurance in addition to this coverage.  For those who do not have a group insurance plan at work that provides disability coverage, private disability insurance is an important part of a well-rounded insurance plan.

Private disability insurance is offered by a wide variety of insurance companies, including many of the major insurers around the country.  Group insurance is generally a policy that is purchased by a company to provide some disability insurance to all of their employees under one policy.  A private disability insurance policy on the other hand is a policy that covers only the one person named in the policy.  Group policies are often less expensive than private ones because there are so many people insured that the company spreads out the risk.  Private disability insurance on the other hand tends to cost a bit more since you are the only person insured.

If you already have some disablity insurance through your employer, it is a good idea to find out exactly how much coverage is provided.  In many cases, it is not nearly enough to cover your expenses if you were unable to work for a period of time.  Private disability insurance may offer you a larger percentage of your salary.  Private disability insurance also goes with you when you switch jobs, so you don’t ever have to worry about what kind of coverage you have in place at any given time.

A good private disability policy can cover up to 70% of your lost wages.  It should also have a clause that adjusts your benefits for cost of living.  If you stay on disability for a long time, inflation can make the amount of money you receive become not nearly enough in a hurry.  

There are two important periods to consider when it comes to selecting a private disability insurance policy.  The first is the waiting period before you are eligible to start receiving benefits.  The second is the period of time for which you will be able to continue receiving the benefits.  A longer waiting period and a shorter benefits period can both help you save some money on premiums, but can make things difficult on you if you need the money badly or if you remain disabled longer than you expected and the benefits run out.  It is important to find the balance between the coverage you are getting and the price you are paying in your premiums.

To choose the best private disability insurance policy for you, it is a good idea to sit down with your insurance agent and discuss your financial situation and what sort of coverage you currently have if any.  An insurance expert can assist you with selecting the right policy to meet your needs at a price that you can afford to pay.  Many people are underinsured when it comes to disability insurance, so take the time to make certain you have the coverage you need.

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