Do I Really need Disability Insurance Coverage?

Many individuals struggle to understand what disability insurance covers. There are two basic forms of disability insurance, short-term and long-term disability. Short-term as its name implies is for a short period of time usually less than a year. Group short-term disability is more prevalent in the work place than long-term. One of the failures that individuals make is assuming that their policy covers 100% of their income. The policy usually covers up to 66 2/3%, it may be only be 50% for 13 weeks only. (Check your employee handbook) Uncle Sam allows you to get the benefit tax free, but you cannot get more in benefit than your pre-tax salary. It is very important that people read their employee benefits carefully.

The two main definitions used to define if benefits under a disability insurance policy are paid include own occupation and any occupation. Own occupation disability means you are unable to perform the substantial duties of your current position in a nutshell. Any occupation includes the duties of a job that you have been trained for through education, training, or experience.

Individual disability policies cover a percentage of your income based on your occupation, the hazard of your responsibilities, and your income. The elimination periods for disability policies usually range from 30-365 days. If you become sick or disabled, exceed the elimination period, and become certified by a physician as unable to work, you may receive a tax free benefit except in rare cases (your employer pays for the policy). The policy is coordinated with any group disability benefits you may be receiving as well as Social Security Disability Insurance if you qualify.

Things to consider when thinking about Disability Insurance:

Can I get sick?

Do accidents occur?

Can I afford to self-fund?

Can I live off my savings?

Does my coverage at work cover short-term & long-term disability?

Do I Really need Disability Insurance Coverage?

Many individuals struggle to understand what disability insurance covers. There are two basic forms of disability insurance, short-term and long-term disability. Short-term as its name implies is for a short period of time usually less than a year. Group short-term disability is more prevalent in the work place than long-term. One of the failures that individuals make is assuming that their policy covers 100% of their income. The policy usually covers up to 66 2/3%, it may be only be 50% for 13 weeks only. (Check your employee handbook) Uncle Sam allows you to get the benefit tax free, but you cannot get more in benefit than your pre-tax salary. It is very important that people read their employee benefits carefully.

The two main definitions used to define if benefits under a disability insurance policy are paid include own occupation and any occupation. Own occupation disability means you are unable to perform the substantial duties of your current position in a nutshell. Any occupation includes the duties of a job that you have been trained for through education, training, or experience.

Individual disability policies cover a percentage of your income based on your occupation, the hazard of your responsibilities, and your income. The elimination periods for disability policies usually range from 30-365 days. If you become sick or disabled, exceed the elimination period, and become certified by a physician as unable to work, you may receive a tax free benefit except in rare cases (your employer pays for the policy). The policy is coordinated with any group disability benefits you may be receiving as well as Social Security Disability Insurance if you qualify.

Things to consider when thinking about Disability Insurance:

Can I get sick?

Do accidents occur?

Can I afford to self-fund?

Can I live off my savings?

Does my coverage at work cover short-term & long-term disability?

Disability Insurance For The Long Term

Disability insurance covers you for an extended period of time. Should you be injured or take ill and as a result be unable to perform the duties of your employment, you will be covered under short term disability, then long term disability insurance will cover you. The coverage can be for a period ranging up to five years or until the disabled individual turns sixty five.

Long term disability insurance is often provided by your employer as part of your benefits package. If you purchase it on your own, the benefits are tax free.

Disability insurance on an individual basis makes great sense as if involved in an accident you are more likely to be disabled than die. Therefore it can be argued that it makes more sense to buy long term disability insurance than life insurance.

Disability insurance policies differ from one provider to the next. It is important that you do your research and find the disability insurance policy that best meets your needs with the insurance company that you trust the most. Insurance companies, through an independent insurance broker, will gladly offer you disability insurance quotes free of charge. You can get quotes online now which is the easiest way as you are not being pushed by an agent.

It is important to purchase your insurance from a company that you trust, because you need the company to be there if you need them. When you get your quotes, be sure to ask questions about the company and the specifics of the policy. Disability insurance needs to be tailored to meet your needs and complement any existing insurance policies that you may already have. Again, be certain that you are buying the plan that meets your needs completely.

Probably the most important thing for you to do, is to read all the provisions of the policy before you buy it.

Disability Insurance in Depth

The role of a disability policy, whether individual or group, protects a certain amount of the employees' salary. The insured may collect a portion of their salary once they become ill or injured, as long as their elimination period has been sufficed. Once the individual is able to return the work full time the benefits will end completely in all likelihood. It should be noted that injuries or sickness arising out of the job are protected by Workers Compensation.

The stereotypical model for a person labeled as disabled is someone in a wheelchair. However sickness can be just as debilitating as injuries from an auto accident. Some people are unaware that disability claims can include sickness, but they can.

Get up to Five Free Disability Insurance Quotes Today!

There are two types of disability policies, short and long-term. Short-term policies last less than two years, while long-term can last to age 65 or older. Both serve their purpose but be aware of the difference.

Group Disability Insurance is often the only way for employees to qualify or pay for disability insurance. The medical history of some employees may cause them to be turned down for an individual policy. Yet depending on the size of the company for Group Disability Insurance, simplified or little underwriting may occur. While others may be stretched to the limit with other debt or bills to pay for another policy.

An Individual policy is written based on occupation, salary, and elimination period. In both individual and group policies, each individual can qualify for a certain amount of benefit based on their salary. Their occupation will influence the price of weekly or monthly benefit. The elimination period tells you how long you must wait before benefits can begin.

The reason to have to have disability insurance is protect your salary from accident or sickness. While individual may purchase this policy, employees may have Group Disability Insurance at work. Remember that you risk your own earning power without proper coverage.

Disability Insurance For The Long Term

Disability insurance covers you for an extended period of time. Should you be injured or take ill and as a result be unable to perform the duties of your employment, you will be covered under short term disability, then long term disability insurance will cover you. The coverage can be for a period ranging up to five years or until the disabled individual turns sixty five.

Long term disability insurance is often provided by your employer as part of your benefits package. If you purchase it on your own, the benefits are tax free.

Disability insurance on an individual basis makes great sense as if involved in an accident you are more likely to be disabled than die. Therefore it can be argued that it makes more sense to buy long term disability insurance than life insurance.

Disability insurance policies differ from one provider to the next. It is important that you do your research and find the disability insurance policy that best meets your needs with the insurance company that you trust the most. Insurance companies, through an independent insurance broker, will gladly offer you disability insurance quotes free of charge. You can get quotes online now which is the easiest way as you are not being pushed by an agent.

It is important to purchase your insurance from a company that you trust, because you need the company to be there if you need them. When you get your quotes, be sure to ask questions about the company and the specifics of the policy. Disability insurance needs to be tailored to meet your needs and complement any existing insurance policies that you may already have. Again, be certain that you are buying the plan that meets your needs completely.

Probably the most important thing for you to do, is to read all the provisions of the policy before you buy it.

A Few Things Everyone Should Know About Disability

Did you know? One year of disability can wipe out 10 year's worth of savings.

Other interesting things to know about disability:

- 7 out of 10 people between the ages of 35 and 65 become disabled for three months or longer.

- The average length of disability lasting longer than 90-days is 36 Months.

- Most American families have only enough money in savings to cover two months worth of bills.

- In 2000, wage and productivity losses from unintentional injuries was $259.8 billion (Statistical Abstract of the US: 2002)

- The maximum Social Security disability payment for 30-yr old earning $70,000 per year is just $1600 per month.

- To be eligible for Social Security disability, your disability must last at least 12 months.

- Social Security Disability will only pay an approved claim after a minimum of 5 months have passed.

So if you suddenly become disabled... how would you pay your bills?

What is disability?

The Random House Webster's Dictionary of American English defines disability as: "Lack of adequate strength or ability; incapacity; a physical or mental handicap; anything that disables or puts one at a disadvantage"

The Social Security Administration defines disability this way: "The inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months." Emphasis Added

Simply put: Disability generally means that you are unable to work. And Social Security Disability means you are unable to work at anything.

Disability can happen at any time, to anyone - regardless of race, religion, gender or profession.

Sometimes people become disabled due to injuries received in a car accident. And sometimes it's a simple matter of getting hurt while participating in sports, or improving your home in your off hours.

A very common injury that can cause you to become unable to work, is a back injury. And back injuries can happen simply by moving furniture, working in a garden, or fixing a leak in your roof.

Other people become unable to work due to an illness or the onset of a disease: Like diabetes, stroke, or heart attack. And even pregnancy can cause some females to become unable to work: If the pregnancy develops other complications that require the woman to stay in bed, she is unable to work.

This Can Happen to You Too.

Unfortunately, people often assume that just because they're healthy, they can't become disabled. And that's simply not true. Accidents happen. So being healthy doesn't usually have anything to do with whether you become disabled.

Let's look at some undeniable facts:

- In 2000, wage and productivity losses from unintentional injuries was $259.8 billion (Statistical Abstract of the US: 2002)

- In 1999: 338,000 people were injured in a fall

- In 1999: 141,000 people were injured due to overexertion

- In 1999: 338,000 people experienced sprains and strains

And just a few of the ways these injuries happened included:

- Hand and power saws

- Hammers

- Kitchen flatware

- Beds

- Tables

- Ladders

- Rugs and Carpets

- Footwear

- Bicycles

- Swimming Pools