Characteristics of Disability-Income Insurance

Disability-income (DI) insurance is a specialized form of insurance that provides a source of income if the policyholder is unable to work due to an injury or illness. These policies are designed to replace a portion of the policyholder’s income up to an agreed-upon amount. There are several characteristics to disability-income insurance that make it a useful resource for individuals: 1. Financial Security: DI insurance provides a particular level of financial security to individuals that doesn't depend on the stock market or other investments. It does not require any additional payment or investment to maintain and will provide a steady stream of income should the policyholder become unable to work due to an injury or illness. 2. Tax Advantages: In some cases, DI insurance can provide tax advantages. In some jurisdictions, money received from DI policies may be excluded from taxes. Additionally, the premiums paid for DI may be tax-deductible. 3. Customization: DI policies can be tailored to an individual's specific needs. Policyholders have the option to select the maximum amount of money they're eligible to receive. This allows individuals to create tailored coverage dependent on individual income needs, as well as the likelihood of any disability taking place. 4. Flexibility: DI policies are very flexible in terms of the number of years for which coverage extends, ranging from 1-10 years for most providers. Furthermore, policyholders can opt for lifelong coverage