Disability insurance pays a benefit if you can’t work because of illness or injury. It covers you for total disability and partial disability. Your independent insurance agent is available to offer you assistance.
Disability plans have a “Definition of Disability” that describes when benefits are payable. The benefit period is how long they are payable. The elimination period is how long after disability occurs benefits are payable.
This article is an excerpt from Trusted Choice. The full article is here: https://www.trustedchoice.com/best-disability-insurance/
Disability plans also have exclusions that describe when benefits aren't payable. Common exclusions are injuries caused by suicide attempt, or the commission of a crime. Disability because of a preexisting condition or illness may also be excluded. Disability plans may also limit coverage for certain conditions. Mental illness and substance abuse benefits are often limited.
Disability plans pay benefits when the definition of disability is met and the elimination period is satisfied (usually 90 days).
An individual disability insurance policy can follow you throughout your career and has numerous advantages over group disability insurance. Your disability doesn’t need to have been caused by your job for it to be covered by individual or group disability insurance.
There are two kinds of individual disability insurance: long-term and short-term. They cover two different disability scenarios. You may be able to convert your short-term coverage into long-term coverage if your disability is more serious than you and your doctors initially realized.
Solo Options:
- Individual disability insurance: This is all about supplementing your income in the not-so-rare event that you will need it due to an injury or illness. Be sure not to confuse this policy with coverage for getting hurt on the job. Getting injured at work actually falls under your employer's workers' compensation policy. Typically, you are getting this policy on your own if your employer doesn't offer it, or if you’re self-employed.
- Individual long-term disability insurance: This provides a portion of your income, as much as 60% - 70%, for as long as your disability keeps you away from work, whether it's years or even decades. Typically, your benefits won’t become available until 90 days into your disability or illness, so be prepared for that. This coverage isn't normally offered by your employer, and if it is, the coverage can be pretty basic. Luckily, if you find your employer’s plan isn't a slam dunk, you can supplement it with another policy on your own through your independent insurance agent.
- Individual short-term disability insurance: This is your other not so long-term friend. And while it covers about 40% - 60% of your income, similar to your long-term friend above, it only lasts a fraction as long. This policy will be in use for months, at the most a year, and is often provided by your employer. Unlike long-term, a short-term disability policy will kick in fast (usually within 14 days), before vanishing like the wind.
Group Options:
- Group disability insurance: Pile an eligible group of employees together and offer them basic disability income insurance at a group rate, and there you have it, group disability insurance. This plan is pretty simple for your employer to offer, pulling all qualified employees together in one easy policy. One of the benefits of group disability is that it covers employees regardless of their health. This makes the rates on average lower than your individual disability insurance, but the coverage is still pretty basic.
- Group long-term disability: Group long-term disability is provided by your employer and assists in paying a portion of your income for a long-term illness or disability if it keeps you from doing your job. Coverage can last for years or more, depending on the policy terms. Like the group disability insurance above, this plan is provided to eligible employees and isn't dependent on health status.
- Group short-term disability: Group short-term disability is like the rest of the group plans discussed, and is provided through your employer. It assists with income replacement during an employee's short-term illness or disability, and coverage lasts an average of 1 - 6 months. It's possible to use your group short-term disability and then move to your group long-term disability plan if the need arises.
- Voluntary disability insurance: This is another employer-offered disability insurance. Voluntary means that the insurance or benefit is volunteered by you, usually during the beginning of employment or during open enrollment. As in, you volunteer to participate in any or all of the benefits offered. Short-term disability plans are normally the type of benefit that employers offer in the voluntary offering, among others.
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