Understanding the Basics of Disability Insurance
Disability insurance is the simplest way you can replace your lost income or paycheck in case you get injured and unable to work. If you consult with a licensed insurance agent, you’ll be surprised at the several riders you may be missing out in the disability coverage.
The types of coverage
The two forms of disability coverage are short-term disability coverage and long-term disability coverage. There are various complementary programs in these distinct policies that are designed for covering specific types of disability conditions.
The policy is designed to replace your lost income to up to 80% or more but for a short period. Depending on the policy, the duration is approximately 60 to 180 days. For instance, if you undergo a major surgical procedure and you feel the recovery period can take a few months, then you should consider a short-term disability policy to replace your lost income. It takes a short elimination period of about 10 days before the coverage kicks in. In some states, the state-run disability policies have different requirements as compared to the policies offered by private insurers.
If the short-term policy runs out but you’re still out of work, you should consider purchasing the a long-term disability policy. The policy typically kicks when you’ve not been able to resume work for a longer period like the aforementioned 180 days. Although the long-term disability coverage may cover up to 60% of your salary, it can also last for years. In fact, depending on the type of policy you purchase, it can also run even for the rest of your life.
Most people confusingly assume that their employers or the government should provide them with disability coverage. However, it’s also true that a few states require employers to provide their employees with disability coverage. State workers’ compensation insurance is a package for employees who get injured while at their workplaces. That is why you should discuss with your insurance agent and secure your paycheck today.