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Disability Insurance

The 411 Disability Insurance

Both short term and long term disability insurance can greatly assist the policyholder and his or her loved ones to keep their proverbial heads above water during an illness or the healing of an injury of a few months or more. It has been proven that working people are confronted with injury more often than accidental death. The idea that the average person would have the foresight to save enough funds to cover any short or long-term disability expenses would seem unlikely, therefore good disability insurance can save the proverbial day.

Disability insurance coverage is designed to provide replacement income should the policyholder become disabled and unable to work for an extended period of time. Many employers will provide short and long-term plans as part of a benefits package. Employees often can choose one or both disability programs and the required premium payments can be automatically taken from the employee’s paychecks to ensure consistent coverage.

Long-term disability is defined by an illness that can persist for 12 months or beyond. This type of policy can be often obtained in an employer benefits package and can help employees in receiving their income during a longer term period of illness.

Employer-provided disability coverage is often less costly than similar private disability plans and therefore very attractive. Short-term disability policies can protect the employee should he or she not be able to work for just six months to a year. Workers in a few states such as California, Hawaii, New York, Rhode Island, and New Jersey all have no cost access to short-term insurance plans. The covered individual will generally receive about two-thirds of their normal income in this case.

Any working individual is a perfect candidate for disability coverage. Obtaining disability coverage from an employer (or in other ways) is a safeguard against the financial consequences from any sudden and serious sickness. If the worker’s family has reliance upon his or her income, disability insurance benefits can ensure that savings will be protected and that bills can be paid for on time. Policyholders need not stress about mortgage or car payments and medical insurance co-pays with this coverage.

In order to receive benefits the policyholder will need to have a doctor certify that his or her short or long-term condition is legitimate. Should the policyholder have both short and long-term disability policy coverage, it is often mandated that he or she first use up the short-term coverage. Most insurance providers will pay out a cash benefit weekly and will be taxed like regular income.

Both short and long-term disability policies types are available from insurers who underwrite this coverage and in the form of a less expensive group policy from one’s employer for example. Private disability insurance is also offered.

Social Security also can provide long-term disability for serious illness that might last beyond 12 months. Keep in mind that applying for Social Security disability will not necessarily mean that benefits will be secured or that pay outs will begin in a timely fashion.

Though one will never know if he or she will need it, disability coverage can be an excellent tool for financial planning. If one is unable to work due to a disability, this can result in catastrophic lost income. With disability benefits, the policyholder can have access to a weekly income and not be burdened with an extensive period of waiting.