Many kinds of disabilities could impact your ability to provide for yourself. As such, disability insurance policies must also come in various forms to address the differing needs of policyholders. For example, if you suffer a wrist fracture, you may be able to return to work within weeks. However, having your hand severed or developing severe arthritis could have long-lasting implications for your career.
Optimal disability coverage may depend on various circumstances, including your line of work, lifestyle and hobbies. A qualified insurance professional can help assess your risk levels and determine which of the following types of disability coverage may be appropriate:
Short-term disability coverage should only be relied on to provide financial aid for a limited time and will generally not offer payments for longer than two years.
Long-term disability policies can provide income replacement for several years and may even last through the rest of your life.
Both short- and long-term disability insurance may also have varying clauses related to maintaining and renewing policies. As a policyholder, you should understand the following terms:
Noncancelable—Your insurer cannot cancel these policies unless you fail to pay your premiums. You also reserve the right to renew your policy without affecting your benefits or rates.
Guaranteed renewable—With these policies, you reserve the right to renew your policy and retain the same benefits; however, your insurer is allowed to increase your premiums as long as they do so for any other policyholders in your rating class.