The article concerns the following question – Why review your current Disability Insurance Policy? It is important that everybody take a look at their insurance on a regular basis. Most of us have several different types of insurance and they all need to be reviewed to make sure that we have the proper coverage. This is true of disability insurance as much as anything else.
Insurance is not one of those things that you buy and then forget about it needs to be constantly updated to deal with changing life circumstances. A periodic review of your disability insurance will help to make sure that you have the coverage you need in the event that you were to get hurt.
It is important to review your disability insurance policy from time to time in order to make sure that you have enough coverage. The purpose of disability insurance is to replace your income in the event that you can’t work. Obviously if your financial obligations have changed over the years you will also need to change your disability insurance in order to keep pace. The last thing that you want is to find out after you have been disabled that the amount you receive in insurance will not meet your financial needs.
This is the sort of thing that you need to find out before you get hurt so there are no nasty surprises. A regular review of your disability insurance policy will make sure that this doesn’t happen. It is also important to look at how long you are going to have to wait in order to actually start collecting your insurance and to make sure that you can survive that long.
Almost all disability insurance policies include a waiting period before you can actually start collecting money. This can be several months in some cases. If you know that you can’t survive that long without an income you are going to want to change to a policy that has a shorter waiting period. This is the sort of thing that a review of your disability insurance can help you identify.
One often overlooked area when it comes to disability insurance is how your income is calculated when it comes to determining how much you will receive in lost income. Usually this is based on your tax returns for the last few years and averaged out. Different insurance providers will use different formulas. The problem could occur if you have been unemployed of on maternity leave during the time frame they use to calculate your average income.
Some companies will allow you to discount those periods and only count the time you were working while other companies will include this in the calculation. Obviously this would significantly reduce the amount you are entitled to in lost wages. If you have had a period of unemployment or leave you are going to want to review your insurance policy and make sure that this period is excluded from the calculation of your wages.