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How Disability Insurance matter

people support each other
people support each other

Disability Insurance is a type of insurance that will replace for the loss of income in case the workers are unable to perform their work or earn money due to their disability. Although people never think bad things will happen to them, but you have to face the truth that it can happen to anyone in anytime. That’s why we buy insurance to protect our family. The following tips will help you understand more about disability insurance and how it can support your life better.


  1. There are two main types of disability insurance. This different definition in your contract will affect your claim later if it happens.

Own occupation: most of people would go for this type because under own occupation, disability is defined as you are not able to work at your “own occupation”. If you can do other works, it doesn’t matter, you still receive the benefits. For example, your current occupation is mechanic, and you can no longer perform your job as a mechanic due to your disability, but then you found another job as salesman. At this point, you are still able to collect your benefits. Definitely, the premium for this policy will be higher than any occupation, but it’s worth the money.

Any occupation: this option is much cheaper than “own occupation”. However, to collect the benefits, you are not able to perform any types of occupation. It means if you still have a chance to work at another kind of job, you are not eligible to receive your benefits.


  1. Choose a waiting period that you think it works best for you. The most common waiting period is 90 days. However, if you don’t feel like you can wait for that long, you can choose a shorter waiting period. As a result, it will impact the amount of premium you have to pay, so carefully consider the option.


  1. Understand the benefits you will collect if you happen to claim it.

Because this insurance is paying your loss income, so the amount of monthly benefits you will receive depends on how much you earn a month before you become disability. The higher income you have, the more you receive. If you are paying for your premium, not your employer, so the receiving benefits will be tax-free. One more important factor that you should consider is that the period you can receive your benefits. You have some options to choose in between 2 years, 5 years or when you turn to age 65. The longer period, the higher premium you have to pay.

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