Individual disability insurance is an insurance that helps to replace a portion of income if sickness or injury prevents from earning and supporting family. It helps to pay regular monthly bills while the beneficiary is recovering from an illness but is still unable to do his job. Thus, individual disability insurance can save you from the following headaches of your life –

• You’ll have sufficient income which will take care of your monthly expenses like food, clothes, utility bills, etc.

• You’ll not have to depend on your relatives for financial support during your illness.

• You’ll be able to maintain your dignity throughout your illness.

Once you’ve decided that you need to protect yourself from financial hardship if you become totally disabled and unable to work, you need to determine a few things that will help to purchase the perfect disability insurance for you.

Tips to buy individual disability insurance

Let’s now check out a few efficient tips that will help you to buy the disability insurance of your choice. These are –

1. Determine disability income benefit: First of all, you need to determine the amount of disability income benefit that will meet all your present and future needs.
2. Length of elimination period: You should decide on the elimination period that you’ll need until your benefits begin. You should decide on how long you can afford without any income if you become disabled. It’s important to note that the shorter the elimination period, the higher will the premium.
3. Maximum benefit level: You should also find out the maximum benefit level that the insurance companies are offering. Most insurance companies usually offer 70% of your current income amount. You can get this information by asking your insurance agent or in the policy manual. An important thing to note here is that all disability income benefits are tax-free.
4. Benefit term: You should determine the length of benefit-receiving period in case you become disabled. Various insurance companies offer various benefit terms like up to 65 years of age or a 2 year benefit period. Choose the benefit term depending on your needs and financial situation.
5. Financial ratings: It’s important that you check out the financial ratings of the insurance companies that will give you an idea of their financial stability. You can also get information about the claims payment record of these companies from your states’ insurance department.
6. Free look period: Most or all insurance companies will offer you a free look period of around 15-30 days during which you can return the policy if it doesn’t meet your requirements. In such cases, you will get your full money back.

Individual disability insurance can replace around 45-60% of your gross income on a tax-free basis in case you’re disabled due to illness. So, it’s advisable that you take individual disability insurance from a reputed insurance company that will help you in your financial distress.