Disability insurance companies provide a source of income to several people having trouble working due to an illness or accident. Their inability to work due to injury or illness could hamper your greatest financial asset – earning power.
If you do not have taken disability insurance protection, you and your dependents would have a tough time making your ends meet in the event of an accident. If you require disability insurance, consider looking at the following details –
- An average disability claim could last for nearly thirteen months. However, 40% and above of full-time workers may not be covered for a short or long-term disability as protection against income loss.
- Despite the chances of nearly one-third of employees resulting in a disability for 90 days of work in their career, there is a lack of disability coverage.
- Appropriate disability policies would require you to purchase from an insurance agency. However, most employers would provide short-term disability coverage. Moreover, the benefits are taxable, provided the employer pays for the coverage.
- Disability insurance has been essential for self-employed workers or the ones unable to acquire a paid sick leave by the employer. It would be advised to buy a policy replacing two-thirds of the monthly income of the worker. Anything above the limit would discourage people to resume working.
- Different features of disability insurance influencing the cost would be inclusive of two factors – the elimination period and disability.
- The duration of elimination would be the days after the beginning of the disability before you receive the benefits. With a longer elimination period, the premium would be considerably lower for a specific amount of disability insurance.
- Consider reading the fine print before buying disability insurance. When you look for a disability insurance policy for guaranteed renewable benefits, it would enable you to make up for lost income for your inability to work at full capacity.
- Consider checking for provisions related to disability benefits offered by an employer disability policy. At times, the income of these sources would be deemed an integral aspect of your policy benefit.
- Look forward to buying a policy for the rest of your working life.
- Consider working with an insurance agent to shop among the competing carriers.
For your inability to qualify for disability insurance at a reasonable price, look forward to investing the money that you would have paid for monthly premiums and emergency reserves.
When do you require short-term disability insurance
You would require short-term disability insurance in the following situations –
Your employer does not offer you coverage
Despite both short-term and long-term disability insurance having been made available through several employers, you should not assume them. As a majority of people were concerned with health insurance and retirement benefits, disability insurance is often not a priority for people. It is the mentality of young people.
Rather than presuming about your company or organization offering short-term disability insurance, find out about it along with the kind of benefits you would earn. In the event, your company does not offer short-term disability, consider making the most of a private plan.
You do not have a short-term disability but have long-term coverage
It could be possible with most people to have long-term disability coverage through your employer but lack short-term disability. Despite most employers offer both the policies together, it would be in your best interest not to assume anything.
Despite you having long-term disability coverage, it would be imperative that you buy short-term disability coverage as well. You do not have to wait for six months for long-term disability to kick in if you have short-term disability coverage.
You are a self-employed person
You would have an insurance policy that you purchase independently. You should look for short-term disability coverage to cover almost all events that may cause your inability to work. It would be inclusive of major illnesses.
You are an independent contractor
Several people would come under the independent contractor in the present times. However, basic elements of independent contractor status have been lacking the benefits.
As the income of an independent contractor is based on their ability to serve the employer, having short-term disability coverage is necessary.