Income Insurance: Long Term vs. Short Term

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Income Insurance: Long Term vs. Short Term

Posted On : Dec-26-2011 | seen (435) times | Article Word Count : 708 |

As more and more people realize the importance of insurance, more and more people have been insuring their material possessions — their homes and cars among others.

As more and more people realize the importance of insurance, more and more people have been insuring their material possessions — their homes and cars among others. However, many of these same people have not realized that they have not yet insured what is probably their most valuable asset — their ability to work and earn an income. This may be so because people find it hard to imagine becoming disabled and it is even harder still to imagine having a disability that lasts longer than a few weeks.
People do tend to have a tunnel vision regarding their work  that is to keep healthy in order to be able to keep on working and to always keep on working in order to earn more money. Nevertheless, even with this kind of focus, it is a fact of life that disabilities, injuries and, accidents cannot be avoided totally. These disabilities can cause you to lose income for days, weeks, even years, or a lifetime of serious disabilities. That’s why if you are the breadwinner in your family, you should consider having income protection insurance Australia. Moreover, you should also pay attention to whether a disability income insurance plan offers long-term or short-term disability benefits, as well as understand the difference between the two.
Long-Term vs. Short-Term
The terms short and long term income insurance have caused a great deal of confusion for many. This problem exists due to the different misconceptions that the words “long term” versus “short term” have triggered.
The easiest way to understand income protection insurance is to categorize it as disability or as “income replacement” insurance  which is actually what it does. It can pay a proportion of your salary if you’re temporarily unable to work because of sickness or injury. It pays up to about 75% of your income in the event that you should become disabled and unable to participate in gainful employment.
Income protection insurance can help you pay your bills by replacing a portion of your income. It can help you maintain your current lifestyle and help protect you and your family from going into serious financial trouble and debt.
Now, long-term and short-term income insurance  by definition  have divergent purposes.
Short-term is intended to pay a percentage of your salary sooner and for a shorter period than long-term disability income insurance.
Under the terms of the policy, short-term policies typically offer two waiting periods--a shorter one for accidents, a longer one for sickness. This is so because many times, employees are required to use sick days before short term disability kicks in, if it’s an illness that keeps them out of work for an extended period of time.
Generally, waiting period ranges from 0 to 14 days, depending on the terms of the short-term policy. However, waiting periods under long-term policies are longer, ranging from 30 to 720 days, although a 90-day waiting period is most common.
In terms of coverage, by definition, short-term may pay benefits for up to two years, although many policies pay benefits for only three months, six months, or one year. Long-term, on the other hand, pays benefits for a far longer period, usually for a few years, up to age 65, or even for a lifetime.
Which is better: Long-Term or Short-Term?
Both terms are great but if you can't afford to purchase both, practically, it makes more sense to purchase long-term income insurance. Usually, most disabilities last only a short time. In this short time, you may be able to financially survive even without insurance. However, a long-term disability can seriously threaten your finances if you do not have insurance.
Before deciding and buying this type of insurance, consider these factors as well:
Other disability benefits. If your disability was work related, you may be eligible for benefits from a government-sponsored disability insurance program such as Social Security or workers' compensation.
Coverage from employers. Many employers offer insurance as part of their employee benefits program, though employers offer short-term coverage more frequently than long-term coverage.
Type of coverage you can afford to buy. Typically, short-term insurance is less expensive than long-term coverage because benefits are paid for a shorter period of time.

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<h1>Income Insurance: Long Term vs. Short Term</h1> Author: <a href='http://www.articleseen.com/profile_Laureen Cownie.aspx'>Laureen Cownie</a> As more and more people realize the importance of insurance, more and more people have been insuring their material possessions — their homes and cars among others. However, many of these same people have not realized that they have not yet insured what is probably their most valuable asset — their ability to work and earn an income. This may be so because people find it hard to imagine becoming disabled and it is even harder still to imagine having a disability that lasts longer than a few weeks. 
People do tend to have a tunnel vision regarding their work  that is to keep healthy in order to be able to keep on working and to always keep on working in order to earn more money. Nevertheless, even with this kind of focus, it is a fact of life that disabilities, injuries and, accidents cannot be avoided totally. These disabilities can cause you to lose income for days, weeks, even years, or a lifetime of serious disabilities. That’s why if you are the breadwinner in your family, you should consider having income protection insurance Australia. Moreover, you should also pay attention to whether a disability income insurance plan offers long-term or short-term disability benefits, as well as understand the difference between the two.
Long-Term vs. Short-Term
The terms short and long term income insurance have caused a great deal of confusion for many. This problem exists due to the different misconceptions that the words “long term” versus “short term” have triggered. 
The easiest way to understand income protection insurance is to categorize it as disability or as “income replacement” insurance  which is actually what it does. It can pay a proportion of your salary if you’re temporarily unable to work because of sickness or injury. It pays up to about 75% of your income in the event that you should become disabled and unable to participate in gainful employment.
Income protection insurance can help you pay your bills by replacing a portion of your income. It can help you maintain your current lifestyle and help protect you and your family from going into serious financial trouble and debt. 
Now, long-term and short-term income insurance  by definition  have divergent purposes.
Short-term is intended to pay a percentage of your salary sooner and for a shorter period than long-term disability income insurance.
Under the terms of the policy, short-term policies typically offer two waiting periods--a shorter one for accidents, a longer one for sickness. This is so because many times, employees are required to use sick days before short term disability kicks in, if it’s an illness that keeps them out of work for an extended period of time. 
Generally, waiting period ranges from 0 to 14 days, depending on the terms of the short-term policy. However, waiting periods under long-term policies are longer, ranging from 30 to 720 days, although a 90-day waiting period is most common.
In terms of coverage, by definition, short-term may pay benefits for up to two years, although many policies pay benefits for only three months, six months, or one year. Long-term, on the other hand, pays benefits for a far longer period, usually for a few years, up to age 65, or even for a lifetime.
Which is better: Long-Term or Short-Term?
Both terms are great but if you can't afford to purchase both, practically, it makes more sense to purchase long-term income insurance. Usually, most disabilities last only a short time. In this short time, you may be able to financially survive even without insurance. However, a long-term disability can seriously threaten your finances if you do not have insurance.
Before deciding and buying this type of insurance, consider these factors as well:
Other disability benefits. If your disability was work related, you may be eligible for benefits from a government-sponsored disability insurance program such as Social Security or workers' compensation. 
Coverage from employers. Many employers offer insurance as part of their employee benefits program, though employers offer short-term coverage more frequently than long-term coverage. 
Type of coverage you can afford to buy. Typically, short-term insurance is less expensive than long-term coverage because benefits are paid for a shorter period of time.About the Author: Insure4U has all your insurance information from evaluating <a rel="nofollow" href="http://www.insure4u.com.au/life-insurance/">Life Insurance</a>, to choosing <a rel="nofollow" href="http://www.insure4u.com.au/income-protection-insurance/">income protection insurance</a>. Let us guide you through the process of finding the right insurance for you and your loved ones Article Source: <a href='http://www.articleseen.com/Article_Income-Insurance-Long-Term-vs-Short-Term_124670.aspx'> http://www.articleseen.com/Article_Income Insurance: Long Term vs. Short Term_124670.aspx</a>

Article Source : http://www.articleseen.com/Article_Income Insurance: Long Term vs. Short Term_124670.aspx

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Insure4U has all your insurance information from evaluating Life Insurance, to choosing income protection insurance. Let us guide you through the process of finding the right insurance for you and your loved ones

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