Does My Term Life Insurance Include disability: Term life insurance is a policy that offers financial help to your family or beneficiaries when you pass away. As the insured, you pay premiums over the lifetime of the policy. In return, the insurer pays a good amount (a death benefit) to the person listed in the policy once you die.
However, will the term life insurance policy cover you if you experience an injury or illness that results in a long-term disability? If you want the answer to this question, read this article to the very end. In this blog, you will learn everything you need to know about term life insurance and disability.
Does Term Life Insurance Include Disability?
Just as I have mentioned above, term life insurance is a financial product that gives money to your loved ones if you die within a set time. But what happens if you become disabled? The policy itself won’t cover disabilities.
However, you can add extra features, called riders, to get disability protection. So, while disability coverage isn’t included in your basic term life insurance. You can customize your policy to include it, making your financial plan more complete. Once the rider is added to your policy, your term life insurance policy will pay your income if any injury or illness results in disability.
Term Life Insurance and Disability Coverage
Term life insurance and disability insurance are two different types of policies. Life insurance provides financial help to your loved ones after you die. The payout is done after you die, and it goes to your beneficiaries. Meanwhile, disability insurance provides financial help if you cannot work. The payment will be made only if the insured is alive. But it can’t work due to an injury or illness resulting in a disability.
If you cannot afford to purchase another policy, you can easily add a disability rider to your current term life policy. Insurers allow you to add riders to your policy to match your needs, mostly at a small added cost. Different riders may help you if you experience injuries or illness resulting in disability.
Disability Income Rider:
This offers you a supplementary income benefit. It is usually paid monthly when illness or injury results in disability. Generally, the benefits are fixed at a policy’s face value percentage. For example, if you have a policy for about a million dollars and the disability income is just one percent, you will get $1,000 per month.
Waiver of Premium Rider:
If you meet the criteria for total disability, you can get coverage without paying for premiums. This means that disability may vary from one insurer to another. Thus, ensure that you compare policies before purchasing.
Accelerated Death Benefits:
This coverage allows you to make use of a part of the death benefit amount if you have a terminal illness.
Who Needs Disability Coverage?
The risk of getting a severe injury or illness is higher than you can ever imagine. If you cannot sustain yourself without spending all your savings if you were to experience an injury or illness resulting in disability, disability coverage may be the right choice for you. You may think disability coverage is only for individuals with dangerous jobs, but that’s a big fat lie. About 90% of long-term disabilities are usually caused by illness or sickness. This means you get sick regardless of the nature of your job.
How to Include Disability Coverage in Your Term Life Insurance Policy
To add this coverage to your policy, you need to meet with your insurer to know if they offer this type of coverage. If they do, you should be provided with the rates they offer and other information you need to know. However, if they don’t offer this coverage, you will have to purchase the disability insurance policy separately from another insurer.
If this is the case, ensure that you compare rates from different insurers before choosing the one that offers the best quotes. Meanwhile, some of the alternatives to life insurance and disability coverage are short-term disability insurance, long-term disability insurance, and worker’s compensation insurance.