What Is Disability Insurance and Do Employers Typically Offer the Coverage?
Disability insurance is coverage that provides regular interval payments for a set amount of time after you have a qualifying condition, or injury. It is normally paid out at a rate of 45 to 65 percent of your gross income. The money is tax free, but the plans are not always offered by employers. There may be times that it is required for you to pay the entire premium to have this coverage.
Who Is Covered By a Disability Policy
The stated employee on the policy is covered in cases where the employer has sponsored the plan. Individual private policies are offered to the person stated on the policy.
How Disability Coverage Works
There is paperwork involved with initiating the coverage benefits of a disability policy. Some of this will have to be filled out by you, other parts by your employer. There will be paperwork to hand to your doctor and have filled out. It will provide the basis for the determination of whether you can work, or qualify as disabled. You will then begin to receive regular payments from the disability company in the form of a check, or direct deposit to your bank account.
Different Types of Disability Coverage
Short Term Disability
There is a 14 day waiting period for short term disability and a benefit maximum of two years. You will receive the stated benefits of 45 to 65 percent of your salary during this time, or as long as you qualify as disabled. You can generally pay extra for additional coverage. Many policies limit the monthly amount to $5,000 dollars, or less.
Long Term Disability
Long term benefits have a waiting period of a few weeks, to a few months. The coverage typically follows the short term period, if there has been no improvement in the condition, or injury. The benefits are payable for up to a few years, to the rest of your life, as long as the benefit premiums are paid.
Benefits of Disability Coverage
Disability coverage provides a real income to pay your bills, mortgage and provide for your family after a debilitating illness, or injury. Unlike Workman’s Comp, you do not have to wait a long period of time for the legal threats to take place and get a lump-sum payment. You will quickly get payments that are similar in timing to your normal paycheck.
Contact insurance experts to find out about disability benefits coverage today!