Don’t Forget About Disability Insurance!

One of the most vital forms of insurance to any working professional is disability insurance.  Also known as income protection, disability insurance protects workers in case they suffer a traumatic injury or are diagnosed with a chronic condition that prevents you working working and earning your paycheck.  There are two major types of disability insurance: private individual policies and group policies.  As a small business owner, you probably do not have a group disability insurance plan, so we are going to talk about the two main types of private individual disability insurance so you can make the right choices for your company and stay away from the unfortunate situation of having your disability claim denied.

The first type of private disability insurance I am going to talk about are policies that have an “any occupation” definition of disability.  These policies only pay benefits if the claimant is disabled from working any occupation, not just the occupation they were working before the disability.  For example, if a construction worker could no longer build houses because they had a back injury that prevented them from standing for periods of time, but they could still do office work that did not require standing, they would be denied benefits under this policy definition.  This is the cheaper of the insurance options, as the coverage is not very comprehensive.

The second type of private disability insurance has an “own occupation” definition of disability.  Using the example from the last paragraph, if the same construction worker could not build houses because of his back, he would qualify for disability benefits because he could no longer perform his own occupation.  This is the more preferable type of policy, but it comes at a premium because of this.  These types of policies are usually purchased by white collar professionals such as doctors and lawyers.

Besides the policy definitions of disability, there are several other factors you must determine before purchasing a policy.  You must decide the percentage of pre-disability income that will be covered by your benefits.  Again, the higher the coverage, the higher your premium would be.  The matter of a residual disability policy or a total disability policy also must be raised.  A residual disability policy will replace income if you are able to perform some functions of your job, but can no longer perform other functions.  The benefit amount is decided by the amount of income lost based on pre-disability numbers.  One the opposite end, a total disability policy only pays benefits   if the claimant is completely and totally disabled.

Starting a new business is a challenging task that can reap great rewards.  However, if you experience an unforeseen tragedy, you need to be prepared to care care of your monetary obligations if you cannot work.  Disability insurance helps you do this and it provides a peace of mind knowing you will be taken care of.  Over the life of a policy, disability insurance can be worth hundreds of thousands of dollars, so it is a bargain to purchase by comparison.  If this information seems overwhelming, do not be afraid to seek out disability claim help, as there are many insurance agents who have specialized in coverage such as this.

About the author:
Derick is a disability claims consultant for Royal Claims Advocates, LLC. They specialize in helping disabled workers file for and obtain their disability benefits.
My website is at:


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