Did you know this about disability insurance?

Disability insurance is a type of insurance product that provides income in the event that a policyholder is prevented from working and earning an income due to a disability. Disability insurance helps protect people from financial losses if an accident or illness renders them incapable of working and receiving regular income.

There are two main types of disability insurance: Social Security Disability (SSDI) and private disability insurance. SSDI is a government program that pays benefits to eligible workers who have a medical condition that meets Social Security’s strict definition of disability and have worked long enough and recently enough under Social Security to qualify for disability benefits. For all intents and purposes we will focus on private disability insurance which is offered by employers, associations, or individual insurers and may have different eligibility criteria, benefit amounts, and duration of payments than SSD - you must have a job first.

Disability insurance is for anyone who relies on their income to support themselves and their dependents. Disability insurance can provide financial security and peace of mind in case of an unexpected injury or illness that prevents one from working. Disability insurance can cover a portion of one’s pre-disability income, usually between 50% to 70%, depending on the policy.

Disability insurance can be used in various situations, such as:

·         When one suffers a short-term disability that lasts for a few weeks or months, such as a broken bone, a surgery, or a pregnancy complication.

·         When one suffers a long-term disability that lasts for a year or more, or results in death, such as a stroke, a cancer, or a chronic disease.

·         When one needs to supplement the benefits from SSDI, which may not be enough to cover one’s living expenses and medical bills.

To put disability insurance to use, one needs to:

·         Apply for disability insurance before becoming disabled, either through one’s employer, an association, or an individual insurer.

·         Pay the premiums for the disability insurance policy, which may vary depending on one’s age, occupation, health, income, and benefit options.

·         File a claim for disability benefits when one becomes disabled, by providing proof of disability, such as medical records, test results, and doctor’s statements.

·         Receive disability benefits after meeting the waiting period, which is the length of time one must be disabled before benefits begin, usually between 30 to 90 days.

·         Continue to receive disability benefits until one recovers from the disability, returns to work, reaches the maximum benefit period, or reaches the retirement age.

·         Important note: the percentage of employees who actually need to use disability insurance varies depending on the industry, occupation, and other factors. For example, workers in high-risk jobs, such as construction or manufacturing, may be more likely to need disability insurance than those in low-risk jobs, such as office administration. Additionally, the likelihood of needing disability insurance increases with age, as older workers are more likely to experience health problems that could prevent them from working.

To learn more on the qualifying specifics of disability insurance such as short term vs. long term, book an appointment and or call us today.

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