What You Need to Know About Long Term Disability Insurance

If you are self-employed, having disability insurance is especially important. That's because you likely will not be able to take time off work to recover. Here's what you need to know about getting disability insurance if you are self-employed: Make Sure That You Have A Long-Term Disability Insurance Plan Not all disability insurance policies are designed to cover long-term disabilities but being disabled for an extended period as a result of an illness or injury is far more common than many people believe. Also, make sure that the plan you choose will cover all your expenses. When Are You Eligible? The eligibility requirements differ significantly from one insurer to another, but there are some common themes that you should be aware of. If you have a pre-existing condition, you may not be able to get disability insurance, but the insurer won't be able to cancel your coverage if you continue to pay the premium and keep the same terms. Also, you will need to show that you are self-employed. This can be done by showing a couple of years’ worth of tax returns, and many insurers require two years of having been self-employed. The specific tax forms that you will need to show depends on the type of business that you own. Another way of proving that you're self-employed is showing a contract to the insurer. How Do You Apply for It? The specific application process varies significantly from one insurance provider to another, but some companies allow you to apply online. If you are a salaried employee, the process can be a bit more complicated than non-salaried employees. If you are unsure what type of policy to get, an independent agent or broker will be able to assist you. What Benefits Will You Receive? The specific benefits that you will receive will depend on the plan that you choose, but benefits can be either full or partial. Here's what you need to know about these two types of benefits that are offered by long term disability insurance companies: What Are Partial Benefits? Partial benefits are offered to individuals who are still able to work a limited number of hours, and they are also calledresidualbenefits. It's important to make sure that your insurer offers both full and partial benefits. What Are Full Benefits? While full benefits are designed to cover all your expenses, they are still likely only to be a portion of what you earned while you were working. How Do You Determine What Policy Is Right for You? In order to determine what plan is right for you, it's essential to consider the elimination period and the benefit period. The elimination period is the amount of time that you must pay into the policy in order to receive benefits, and the benefit period is the length of time that you'll have access to benefits. Benefit periods often are for a period of around five years, but some policies offer a benefit period that lasts until retirement. Many affordable policies have an elimination period of around 90 days, but more expensive plans can have a shorter elimination period. Less expensive plans can have a longer elimination period.

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