Several different types of insurance services exist in the current insurance industry. Most of them are basically providing a safety in case of an accident. Income protection or disability insurance insures the earned income in terms of the risk that a disability might create, for example, barring an individual’s ability to work. Income protection includes short and long term benefits and paid sick leaves.
GROUP DISABILITY INSURANCE
Group disability insurance is available to organizations looking to provide income protection to their employees or members. Purchasing the insurance for a group of people significantly reduces the cost compared to buying insurance individually. At the same time, it is more attractive for the consumers as well, since risk assessment is not done on individual applicants, rather as a group, it significantly reduces the premium cost of having the insurance.
WORKER’S COMPENSATION VS DISABILITY INSURANCE
An individual is only eligible for worker’s compensation if an injury or illness occurred on the job. But only 5% of impairing incidents or illnesses are related to work, while a majority of the disability claims are illness related rather than accidents. Hence a large number of people suffering from a disability do not get any compensation, thus jeopardizing their future.
IMPORTANCE OF GROUP COVERAGE
Financial advisors are the only source of purchasing disability insurance, which is much more expensive compared to employer sponsored group insurance. According to the bureau of Labor Statistics, only one third of the workers in the private industry have access to employer sponsored group insurance. It is advised that those who have the option should opt for disability insurance in order to protect their future financial status. And before buying disability coverage from the individual market, check if your employer offers the option to buy and add addition coverage as part of their benefits package.