Disability Insurance - Types of Coverages

As we mentioned in other articles,the main purpose of disability insurance is to to replace an individual's income should they be unable to work, helps to balance between personal earnings and expenses suddenly is upset, and the threat of financial disaster can quickly become a reality as a result of either an accident or a sickness. In this article, we will discuss types of disability insurance issued by the insurance companies.
There are 2 types of disability insurance
1. Non-cancelable and guaranteed renewable policies:
This is the most desirable form of coverage. Its coverages include the following
a) After the policy is issued,the premium payment is guaranteed by the insurance company over the life of the policy.

b) Unless the insured fails to make premium after the grace period expired. The insurance company cannot cancel the contract for any reason.

c) After the policy is issued the insurance company can not change the benefit amount for which the insured has been underwritten.

Since the policy is non-cancelable and guaranteed renewable, it is the most expensive form of disability insurance. Also to cope with the claims that are increasing as a result of the liberal policy definitions and a liberalization of underwriting guidelines, most insurers have increased the premium schedules recently.

2. Guaranteed Renewable Policies
The insurance company can not cancel the policy, however, they can increase the premium on a class basis to reflect its claims experience.These type of policies are becoming increasingly popular due to the savings in premiums because it is less expensive than non-cancelable and guaranteed renewable policy.

I hope this information will help. If you need more information of the above subject, please visit my home page at:
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