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 make premiums over the lifetime of the policy. In return, the insurer pays a good amount (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 is everything you need to know about term life insurance and disability.
Does Term Life Insurance Cover 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 be able to 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 distinct types of coverage. 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 you with financial help if you cannot work. The payment will be made only if the insured is alive but can’t work due to an injury or illness resulting in a disability.
If buying an additional policy isn’t within your budget, you can conveniently add a disability rider to your existing term life insurance policy. Insurers allow you to add riders to your policy to match your needs, mostly at a small added cost. There are different riders that may help you out 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 about a one million dollar policy 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. So ensure that you compare policies before purchasing.
- Accelerated death benefits. This allows you to access a portion of the death benefit amount if you are diagnosed with 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 could be the right choice for you.
You may think disability coverage is only for individuals that have dangerous jobs, but that’s a big fat lie. Approximately 90% of long-term disabilities result from illness or sickness, indicating that such conditions can occur regardless of your occupation.
How to Include Disability Coverage in Your Term Life Insurance Policy
To include this coverage in 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 workers’ compensation insurance.
