When people think insurance they usually think of homeowners insurance and auto insurance. While they may not think of disability insurance (DI), this is an important part to any person’s portfolio. An estimated 25% of people will experience an extended disability because of illness or injury. Many people see disability insurance as an extra expense that does not protect them from losing their income. Let’s now examine the myths around disability insurance. This is a very important insurance but it is often pushed to the bottom on people’s risk mitigation priorities. If you are looking for quality disability support services anywhere and under any circumstances, you can find them on disability support services Melbourne.
About 33% are covered by their employer’s disability insurance. For the fortunate 33%, they believe this is enough coverage. Many group DI plans are very restrictive. They pay only if a person can’t work in any profession. If a surgeon is diagnosed with debilitating joint pain and is unable or unable to perform surgery, but she can still work in another job, such as teaching, then her group policy will not cover her. If the employer pays the premium for the policy using pre-tax dollars any benefits paid are considered taxable income. DI policies usually pay between 60% and 66% from a worker’s gross income. Taxing this benefit can result in more than a third of the net proceeds being lost. These are two reasons why group DI policies may not be a better option than individual DI insurance. The remaining 67% are not covered and have no income substitute in the event that they are disabled or become incapacitated.
The second myth is the belief that one can die early rather than become disabled and losing their income during one’s working years. Actually, serious disability caused by injury or illness can be quite common. From the age of 20 until retirement, the risk of someone suffering a serious disability which renders them unable to work is approximately 25%. Unum Insurance has found that 60% percent of all their disability claims relate to women. This is the equivalent of the risk of death prematurely for males between the ages 25 and 64, which is approximately 17% versus 11% for females within the same age range.
The next myth confuses disability insurance with workman’s compensate insurance. These are totally different products. The former is designed for wage replacement and benefits related to an injury or illness that was directly caused by employment. DI is a wage replacement product that can provide up to 66% income for any injury or illness which prevents someone from working for extended periods. Only 5% or less of disability claims relate to work, so they are not covered by workman’s insurance. Ninety percent of disability claim are for illnesses that aren’t related to employment. This is because your chances of being disabled due to a non-work-related injury or illness that leaves you out of work for extended periods of time are at least 18 to 19. Workman’s comprehensive insurance does not replace disability insurance.