There are Short Term Disability Insurance and Long Term Disability Insurance coverage. The Short Term Disability Insurance, as the name indicates, provides substitute income for short durations. When you undergo a major surgery or prolonged medical treatment for any ailment, you suffer loss of earnings as you are unfit to work. By opting for this insurance, you can supplement the income gap for that period. Till you become alright and return to work, you can stop worrying for money needed for every day expenses.
The Long Term Disability Insurance similarly offers substitute income for long period maybe even up to a person’s retirement age. This insurance is understandably meant for more prolonged periods of incapacity to work. Critical injuries as a result of road accident could mean several months of inability to resume work. The long term insurance is more focused in eliminating your concerns about how to pay your bills over many months or even years. This insurance can also help fill the void before a person can qualify for social security disability.
Yet another type of insurance is Accidental Death and Dismemberment Insurance (AD&D) which additional benefits if death has occurred due to an accident or if the insured has suffered accidental loss of a limb or eye. Accidental death and dismemberment insurance pays you or your beneficiary when you are injured or die in an accident. The plan pays varying amounts depending on the extent of injury. For example, the full benefit is paid if you die in an accident. If you lose a hand or a foot, 50% of the full benefit is paid. AD&D insurance also provides a lump sum payment if death or permanent disability is the direct result of an accident.
Life Insurance, as widely known, helps the survivors of a family with the financial means to cope with the death of one of its members. The beneficiaries nominated for this purpose receive the insurance amount upon the death of the insured person. Life insurance provides a fixed sum of money to the beneficiaries upon death of the insured. It is intended to replace the deceased’s loss of current and some future income, and may also be useful in estate planning.
Beneficiaries will receive payments whether the insured dies of natural or accidental causes. AD&D insurance provides a lump sum payment if death or dismemberment is the direct result of an accident If the insured has both life and AD&D insurance and dies as the result of an accident, both covers are paid to designated beneficiaries. Life insurance may also play a role in estate planning, or in choosing retirement income options, depending on the health of the employee and his dependents. Life insurance should be viewed in the overall context of the individual’s total financial plans.
As regards beneficiaries, you can name more than one person as your beneficiary. However, you must designate the same beneficiaries for Basic Life, Optional Life and AD&D. The Life Insurance premium is determined by your age, whether you are a smoker, your gender, the amount of cover you require and the number of years it is required. There is a guarantee that the amount you pay will not increase throughout the tenure for which you are covered unless you choose the Inflation Option.
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