A serious illness or injury is a life-changing event. Let alone the immediate health worries and costs of treatment, if you’re left unable to work as you did before, the drop in income can be devastating. While your direct medical costs may be covered by your health insurance, most policies won’t help with regular expenses such as your mortgage, school fees, or other day-to-day living costs.
However, there’s a form of insurance specifically designed for these unfortunate situations. Disability insurance will provide you with a fixed monthly income to soften the financial blow of serious illness, giving you space to concentrate on recovery and adapting to your new circumstances.
What Disability Insurance Offers
If you’re afflicted with a serious medical condition which reduces your capacity to work, then disability insurance will pay you a fixed monthly income to help you cope financially. The amount of money you receive depends on the level of coverage you take out, but a typical figure would be up to 60% of your previous income.
Most conditions and injuries are eligible for a payout if they significantly reduce your earnings. Examples include:
- Heart disease, heart attacks, and other cardiovascular problems.
- Conditions seriously affecting sight or hearing.
- Multiple sclerosis.
- Most forms of cancer.
- Traumatic brain or spinal injury.
- Loss of limbs through accident or surgery.
- Mental health issues including major depression, bipolar disorder, and post-traumatic stress disorder.
It’s important to note that pre-existing conditions which go on to worsen may not be eligible for a claim, so if you already suffer from diabetes, for example, check which exclusions a policy makes before signing up.
How Much Does It Cost?
The cost of a disability insurance policy will depend on various factors, including:
- The monthly income you want to receive after a claim.
- The number of months’ delay after diagnosis before payouts begin.
- The length of time you want the payouts to continue. Short-term cover will be much less expensive, but long-term or permanent cover provides greater security.
- The range of conditions covered. Some policies will allow claims for any condition which affects your ability to work, subject to a doctor’s confirmation, while others have a list of allowable conditions.
The lowest cost option is usually through your employer, in which case most of the deciding factors listed above have already been decided by your company. If disability insurance is not available at work, compare the options you find online.
Why Choose Disability Insurance?
There are many types of insurance which pay claims after disease or injury, including general health insurance, critical illness cover, mortgage insurance, and even some kinds of life insurance. However, most of these policy types are aimed at covering medical expenses directly, or providing lump sum payments to clear debts and otherwise put your finances in order.
Disability insurance, on the other hand, provides an ongoing income which could save you from financial difficulties at a time when you need to focus purely on your health. If you currently enjoy a comfortable income and are worried about how you’d cope if medical issues reduced this, then disability insurance is an option well worth exploring.