Aflac Disability Insurance
You've probably seen the Aflac Duck on your TV, quacking out the name of the insurance company as a number of different people from all different walks of life evaluate how they might handle a time when they are out of work due to disability.
While Aflac now writes a number of different policies since its recent expansion, the company first became popular as a short term disability company. Aflac, founded in 1955, does business in the same way it always has, deducting their premiums from customer payrolls. Today, Aflac is the largest “supplemental health” insurance company in the United States, a title it has held for years over its competitor, Allstate insurance.
Aflac Disability Insurance
Aflac sells only short term disability insurance, or insurance that is meant to provide support for only a brief amount of time. Long term disability isn't offered by Aflac, and only a few insurance companies offer these policies as social safety nets like Social Security in the United States remove much of the demand for this kind of protection. Short term disability insurance is also known as supplemental income insurance.
Aflac's disability insurance customers have a selection of options and variables with which they can use to build their policies. Here are a few of the variables:
Monthly benefits are the amount of money you wish to receive should you become disabled for a very short period of time. Usually, disability insurance policyholders purchase this insurance in an amount that is equal to, or slightly less than their monthly income, or an amount that covers their minimum monthly expenses. Aflac customers can purchase policies with monthly benefits ranging from $500 to $5000, depending on the customer's income, and the benefit period. Monthly benefits are in actuality daily benefits, since the monthly benefit is divided by thirty and calculated daily. So, a disability that lasts 20 days, for example, would generate a cash payout from Aflac in the amount of two-thirds of the monthly benefit.
The benefit period is another important part of a policy. The benefit period ranges from 3 to 12 months in quarterly denominations up to 24 months. Essentially, the benefit period is the maximum amount of time in which you will receive monthly benefits. Thus, a policy with a benefit period of 12 months would be more expensive than a policy with a 3 month benefit period, all things being equal, since the risk involved with a year (12 months) of protection is greater for Aflac than with a 3 month policy.
In terms of a disability policy, the elimination period is effectively a deductible. The elimination period is the amount of time from when you become disabled and when the first monthly benefit distribution is made for your disability. Aflac offers the following elimination periods: 0/7, 0/14, 7/14, 0/30, 30/30, 60, 60/60, 90/90, and 180/18 where the first number is the amount of days for accidents, and the second number is the amount of day for sickness. A customer with a 0/7 policy would begin receiving benefits immediately for accidents and after a week for sicknesses, while a customer with a 30/30 policy would receive benefits 30 days after the disability is said to have officially started.
There are a few important notes about what triggers a disability, and the terms of the policy. Aflac considers a disability to be a disability that is documented by a physician or medical professional in which the insured party loses their source of income. All Aflac policies are guaranteed-renewal until the next renewal after reaching 70 years of age. Also, no rate increases are allowed (as noted in the policy) unless rates are increased for the entire class of customers. These sections of the policy, which you should read carefully, are perhaps the most important.
As with most insurance policies, pre-existing conditions are often a concern of both the insurance company and the policyholder. Aflac policies cover disability caused by pre-existing conditions only if the disability occurs more than 12 full months after the start date of the policy. A pre-existing condition, as defined, is an injury or sickness within the 12 months prior to the start of the policy a reasonable person would've sought medical attention, consultation, advice, diagnosis, or care.
Pregnancy is considered a disability, and Aflac, much like other insurance companies, provides protection for those who are temporarily disabled due to pregnancy. Under the terms of Aflac disability insurance, a pregnancy is considered to be a sickness, and policyholder's will be compensated for their pregnancy related disability should it occur more than ten months after the policy is in place. For c-sections, Aflac offers a maximum of eight weeks of coverage, while noncesarean pregnancies are given six weeks of coverage. From each coverage length, however, policyholders must first subtract their elimination periods.
Aflac disability insurance is an excellent product for those who wish to protect themselves from any interruption in their work-life and any potential financial problems that may result from short term disability. With proper financial planning, a short term disability insurance can provide income protection, and allow for earnings that are sufficient enough to cover your monthly bills, and routine expenditures at a very low, fixed monthly price.