Disability Insurance

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Disability Insurance

Life is unpredictable, and while we cannot foresee what the future holds, we can certainly prepare for it. One of the biggest financial risks individuals face is the potential loss of income due to an unexpected disability. Disability Insurance serves as a crucial financial safety net, ensuring that you continue to receive an income even if you are unable to work due to an illness or injury. At KYC Financial, we provide tailored disability insurance plans designed to protect your financial well-being and maintain your standard of living in challenging times.

Disability Insurance is a policy that offers income protection if you become unable to work due to a physical or mental condition. It replaces a portion of your income, helping you cover daily expenses, medical bills, loan payments, and other financial obligations. Whether you are self-employed, a salaried professional, or a business owner, disability insurance ensures that you and your family remain financially secure even when you’re unable to earn.

There are two primary types of disability insurance:

Short-Term Disability Insurance (STD) – Covers a temporary loss of income due to injuries or illnesses that prevent work for a short period (typically 3 to 6 months).
Long-Term Disability Insurance (LTD) – Provides financial assistance for an extended period, often until the policyholder reaches retirement age, if they are unable to return to work.

Many people assume that a disability won’t happen to them, but the reality is that unexpected illnesses and accidents can affect anyone at any time. Here are some key reasons why disability insurance is essential:

How Disability Insurance Works

When you purchase a disability insurance policy, you agree to pay a monthly premium. In return, the insurer provides financial assistance if you become disabled and cannot work. The policy terms typically include:

1. Elimination Period

The elimination period is the waiting period before benefits begin. It can range from a few days to several months, depending on the policy you choose. A shorter elimination period often results in higher premiums, while a longer period may lower costs.

2. Benefit Amount

Most disability insurance policies replace 50-70% of your pre-disability income. The exact percentage depends on the policy and provider.

3. Benefit Duration

Benefit payments continue for a specified period, which can be a few years, until you recover, or until retirement age. Long-term disability policies often provide coverage until age 65 or older.

4. Definition of Disability

Policies define disability differently:

Own-Occupation – Provides benefits if you cannot perform the duties of your specific job.
Any-Occupation – Provides benefits only if you cannot work in any job suited to your skills and education.