It isn’t your home, car or retirement account that is your most valuable asset. It is the ability to live. Personal Disability Insurance pays you a portion of your income if, due to a disease or injury, you can’t work for a longer period. “This coverage is expected for everyone who relies on a pay check.” says Keith HOFFMAN, NFP Corp.’s Vice Chair of Disability Insurance, a New York-based insurance and advisory firm. The best-known insurance coverage is the one that actually covers the risk of being ill or injured and unable to work and earn your pay check.
Why you need disability insurance
Although nobody knows the exact figure, it is estimated that 30% of American employees in their working years will be disabled for up to 90 days. The triste truth is that most Americans can’t afford this event either. In fact , the main factors behind foreclosures and bankruptcies in the USA today are illness and injury. Disability insurance guarantees you continue to receive wages and continues until you are able to return to work if you do not work due to illness or injury.
“More than one in four 20-year-olds will experience a disability for 90 days or more before they reach 67”.
“You never think it’s going to be you,” says Carol Harnett, president of the Council for Disability Awareness, an insurance industry group.
Types of disability insurance
There are two main types of insurance for disability: short and long-term coverage. Both substitute a part of your monthly base pay for disabilities up to a maximum limit, for example $10,000. Long-term policies pay for additional services, like return-to-work training. Many Group Disability Insurance Companies also provide easy Disability Income Insurance Quotes.
Short-term disability insurance
- Usually, 60 to 70% of the basic salary is substituted.
- Depending on the scheme, it costs for a few months to a year.
- It could take a short period, like two weeks before you get disabled and before you receive benefits.
Long-term disability insurance
- In most cases 40 to 60% of basic wages are substituted.
- When disability ends, the benefits end. When the illness persists, payments cease at a retirement age or after a number of years.
- A typical 90 days waiting period until benefits are paid is after disability.
The policies on disability vary in their definition of disability. Some policies only pay if you do not have a job that you qualify to work for. Others pay if you can’t do a job in your job. Most plans include partial disability, meaning that if you can work part of the time, they pay part of the value. Others only pay if you can’t work.
Ways to get coverage:
- Sign up at work to be protected by company funded or get Disability Income Insurance Quotes. Most employers who offer insurance on disability pay certain or all premium costs. According to the Society for Human Resource Management: California, Hawaii, New Jersey, New York and Rhode Island, five states grant or require employers to provide short-term disability benefits.
- Purchase workplace disability insurance. Many companies do not pay for the treatment of disabilities, but provide it as a free service. This makes it possible for employees to receive coverage at a group rate via the insurance broker from Group disability insurance companies.
- Purchase insurance for disability by a professional association. Most professional groups offer group rate membership coverage.
- Purchase a separate disability insurance plan. You can get it from an insurance broker or from an insurance undertaking directly. Although some companies offer short-term policies, most of the individual disability policies sold are for long-term cover.
You’re tempted to cross your fingers and hope that you are overcome by misfortune. But it is easy to see if you look at the facts: it is not just important for proper protection against the risk of life, it is a disguised bargain.