Disability insurance is the mutual agreement between the
policy provider and the beneficiary in which the provider agrees
to pay a certain amount of money to the beneficiary on certain
unexpected event leading to a disability, which incapacitates
the person in doing his duties of the occupation and / or of any
other job.
Disability insurance is of three broad types
depending on the clause put forward by the insurance provider:
a) Own occupation disability insurance
b) Income replacement
insurance
c) Gainful occupation coverage
1) Own
occupation disability insurance refers to the insurance money
claimed by the beneficiary on his/her inability to perform the
regular duties of the regular occupation although the person may
or may not able to do another job.
2) Income replacement
insurance means that the policy provider is supposed to pay the
agreed amount in case because of some mishap you are not able to
do your duties both in your occupation and any other job.
3) Gainful occupation coverage denotes that the beneficiary will
get the payment if he / she is neither able to perform the
duties of the occupation nor any other work which the person is
capable of doing because of his/ her education or knowledge.
There are certain other legal terms attached to this type of
insurance. Elimination period is the time period from the time
of the disability to the maximum time you are eligible to earn
benefits. A short elimination period will be charged higher than
the longer elimination period.
The period of time the
beneficiary is eligible to earn benefit is called the benefit
period. Now the most important thing is certain points which are
excluded from the usual policies for e.g. if the claimant has
suffered the disability in times of war or even while in alcohol
or drugs or having the damage while involved in crime most of
the policies either refrain from providing benefits or will
provide only limited benefits. These points are to be looked for
before signing onto the policies for these are usually written
in fine print.
About the Author:
Rita Roy writes about Disability insurance topics. Learn more at
http://www.disabilityinsurancefinder.com .
