1. What is a disability insurance policy?
Disability insurance is a policy that provide financial reimbursement in the event that a worker has no ability to perform his or her work and earn money because of a disability. Different types of disability insurance can be purchased at numerous organizations and each insurer as well as type of insurance will apply specific rules such as what constitutes a disabled and under which circumstances a person can receive the benefits offered by a disability insurance policy.
Disability insurance is divided into two basic types: The short term and the long term.
· Short term insurance policies: offer the insured financial support (a portion of his or her salary) in a short period which is typically three to six months. A 9 to 52 weeks policy is also included in short term disability insurance.
· Long term insurance policies: offer the insured financial support in a long period which lasts for more than six months or a number of years depending on the contract signed between the two parties.
Both of these policies require that a person has to be disabled in a certain period before receiving benefits offered. This period is called an elimination (a waiting) one, and the insured can only be beneficial from the purchased policies when this period is over. In case the insured can perform his or her work and earn money before the end of the elimination period, he or she will not receive any financial support.
2. What are the types of disability insurance and their requirements?
Before purchasing a disability or any other kind of insurance policy, it’s best for us to know well what the types they consist and what requirements to meet.
Disability insurance comes in use under many forms and can be obtained for several costs through numerous providers. There are two typical disability insurance policies offered by companies or organizations these days: “own occupation” and “any occupation”.
The “own occupation” represents the situation in which the insured no longer has the ability to perform his or her occupation, and in such cases the insured is considered as a disabled. The “any occupation” is the stricter one and this policy is only applied when a person is unable to perform any kind of job at all. While the “own occupation” is more expensive and have fewer requirements to adapt, the “any occupation” is cheaper as there is less chance of the insured receiving benefits under such strict policies.
3. What are the steps in the application process of a long – term disability insurance policy?
As mentioned, disability insurance is divided into two types: the short – term and the long – term insurance, however, the long term is more highly – recommended. The process of purchasing a long – term insurance policy will take from 4 to 6 weeks and down below will be some key information you may need when purchasing a long – term disability insurance policy.
· Compare quotes offered among the providers
In this day and age, you can seek and purchase a long – term policy online and offline. It’s advisable to spend time searching for insurance quotes from multiple websites and comparing them to find out which one is most suitable for you.
· Complete all the paperwork
Once you have found a suitable policy, check your information carefully before filling them in the application form provided. You will also fill in a few authorization forms so that your health information will be updated to the insurer.
· Take a medical exam
The insurer will set up a paramedical test directly, and a technician is appointed to carry out this checking. The test can last for 30 to 45 minutes and during the test, your height, weight, blood pressure as well as urine sample. Remember to bring up any pre-existing conditions if you have as they may affect your coverage afterwards.
· Do a phone interview
When applying for the long – term insurance policy, a rep from the insurer will call to ask some questions about your lifestyle including what your hobbies are, how often you travel and what there are in your medical history, and this call usually takes 20 to 25 minutes.
· Underwriting and approval take place
Underwriting accounts for 2 to 4 weeks in this process, depending on how complicated your health history is. In other words, the more complicated your health history is, the longer the underwriting takes. Once your policy is completed, the broker or the insurer will deliver it to you as soon as possible.
· Complete purchasing a disability insurance policy
Signing a delivery receipt and authorizing a payment method are compulsory when activating the policy. Do expect that the long – term disability insurance policy will cost around 1% to 3% of your average salary.