More than just Life InsurancesPosted by Nick Niesen on October 29th, 2010 Insurance, as we all know is a form of risk management primarily used to hedge against the risk of potential financial loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium and duty of care. When we think of taking insurance what immediately strikes our mind are the life insurances. Families often consider life insurance as necessary as a sound roof when it comes to protecting them from the harsh winds of fate, especially when children are small. Primary bread earners want assurance that even if worst things happen, the house will be paid for and the youngsters can continue to go to college. But there are many worst things which can happen within one?s life period like a disability that could knock the family provider out of the workplace. While industry studies show that workers are three to five times more likely to be disabled than die early, disability insurance is often neglected.What is the point of having a life insurance if you are disabled? While premature death tends to have a bigger emotional impact, disability can be equally, if not more, devastating to a family's financial stability. Disability can be long term or short term and can be broken down into a number of broad sub categories. The often heard ?It won?t happen to me? has become a joke as daily someone or the other living in this world is diagnosed with some kind of a disease or other. For example Diabetics is one such kind of a disease that is common among youngsters today. Shocking to hear!!! But true facts are sometimes difficult to accept. With such a situation in hand, there is a high demand not only for life insurances but also disability insurances. Disability insurances are of two types; Based on the type of disability, there are various different policies to suit you need and requirement. ?Short-Term Disability policies (STD) have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years. Disability policies have two different protection features that are important to understand. 1.Noncancelable means the policy cannot be canceled by the insurance company, except for nonpayment of premiums. This gives you the right to renew the policy every year without an increase in the premium or a reduction in benefits. 2.Guaranteed renewable gives you the right to renew the policy with the same benefits and not have the policy canceled by the company. However, your insurer has the right to increase your premiums as long as it does so for all other policyholders in the same rating class as you. In addition to the traditional disability policies, there are several options you should consider when purchasing a policy: Additional purchase options If you decide to buy a private disability insurance policy, remember that policies are legal contracts. Read and compare the policies and understand the provisions before you sign. In comparing policies, you might want to consider: ?Is disability defined as your inability to perform your own job or any job? There are many disability insurance companies and agents all around the world to offer their services .Based on one?s necessities, he or she can choose the best disability insurance to suit their needs. Like it? Share it!More by this author |