Disability insurance is designed to replace roughly 50% of your gross income on a tax-free basis should a sickness or illness prevent you from working. Unlike Critical Insurance which will pay you a one-time lump sum benefit, disability insurance policy will pay you a monthly benefit just like a regular pay cheque you get from your employer. The benefit payment can be taxable or non-taxable, based on the amount of benefit required and whether it is an individual plan or group plan provided by your employer.
The major features of a disability insurance policy are very crucial in choosing the right plan that suits your need. Whether you are employed or self-employed will also play an important role when designing your disability plan.
These are some of the requirements that differ from plan to plan and careful consideration on your part is paramount.
- Meaning of Total Disability
- Non-Cancellable and Guaranteed Renewable Options
- Elimination period, also called Waiting Period
- Benefit Duration
- Optional Policy Riders
- Policy Exclusions