Disability insurance helps cover your expenses if you are unable to work due to illness or injury. Throughout your work history, the probability of becoming disabled is higher than death before the age of 65. So why aren’t more people purchasing disability insurance policies?
Historically, workers are more likely to buy life insurance, than disability insurance. Many people don’t have the full facts about disability insurance, while some are totally unaware of the benefits of this type of insurance coverage. If this sounds like you, then read on to get up to speed and decide on your next move.
Disability insurance, also known as disability income insurance, is a coverage that protects your income against the risk of disability. For example, if a worker suffers from an inability to perform their work duties due to a disorder or an injury, they will not earn an income if they don’t have disability insurance, but if they do, the policy will cover them until they are able to resume work.
There are two major types of disability insurance: short-term disability benefits (STD) and long-term disability benefits (LTD).
Short-term disability insurance protects employees from temporary loss of income. With a short-term policy, you will receive a percentage of your income lost due to sickness or injury. This policy is usually provided by employers, and are sometimes provided under group insurance packages or as part of a benefits package.
Just like the latter, if your employer does not offer this type of coverage, you can purchase an individual plan from an insurance agent.
Most disability insurance plans include certain stipulations regarding eligibility. Some will specify a minimum service period and others may need you to have worked full-time or consecutively for a certain period of time.
Long-term disability insurance covers a part of your income if you are injured or ill. When you are unable to work for a long period of time, a long-term disability plan can cover a part of your wages and will typically start after a short-term policy has elapsed.
The time frame of a long-term plan will vary from policy to policy, but will usually take about 10 to 53 weeks, with the average taking about 26 weeks.
If you are looking for state specific Disability Insurance quotes, costs and information:
