Difference between Health Insurance and Disability Insurance
Insurances are one of the most convenient ways that people can get benefits in times of need. With a minimum deduction pay check, you are entitled to avail health insurance as well as the optional disability insurance. Both are very helpful when you do not have the money to pay a large sum for your hospital bills or doctor bills. Disability insurance coverage is a necessary for those who do not have a source of income due to becoming permanently disabled and one loses the means to support oneself. Both of these benefits vary in types and coverage, depending on the money invested by the plan holder and the type of insurance he wants to use.
Description
Company sponsored insurance plans usually include health insurance, as well as short term and/or long term disability insurance. Both types of insurance are available through private insurance companies and government mandated insurance programs. Both types of insurance may be availed by a group (like a company to cover their employees) or can be bought by an individual. In both cases, these groups or individuals pay a certain amount of premium in order to cover them for unexpected expenses related to health. A disability income insurance or simply disability insurance is a type of insurance that guarantees a plan holder’s beneficiary to receive the monthly income of the insured in case the latter gets into an accident which will make working and earning money impossible. Some of the inclusions in this insurance are paid leaves, long-term disability benefits and short-term disability benefits.
How it Works
Health insurance works by paying a computed amount as part of the amortization over the duration of the plan that an individual or a group has selected. Most often, these insurances are short-term, which only covers a year of insurance. Once the contract has expired and there were no health-related problems that are reported, the premiums you have paid cannot be reimbursed and you have to sign a new contract for another year. Once there is a health-related issue, the insurer pays for the expenses you incurred only up to the amount specified in the contract. Non-government disability insurance on the other hand also requires monthly premium payments to be made by the plan holder. In the event that he gets involved in an accident which makes him unable to work, the insurance will cover the monthly earnings only up to the specified amount in the contract.
Payment Scheme
Both health and disability insurance are paid monthly through premiums. These are computed by estimating all the expenses a person is risked to incur, and a payment program is developed.
Summary
- Health insurance is a comprehensive type of insurance which includes additional options such as disability and other forms of insurance related to health.
- Disability insurance is a type of insurance which covers monthly income and earnings of an individual who is permanently disabled, and is unable to work or earn anymore.
- Both health and disability insurance can be acquired by a company for their employees or by an individual, wherein they have to pay monthly premiums to cover them from unwanted expenses from health and disability concerns.
