If you have a family that depends on your income you surely must have disability insurance policy to protect your earning capability. Studies have shown that an average human being has more chances of becoming disabled from an accident or illness than dying. So, it is not unusual that you too have a chance of becoming disabled.
- What are the basic types of disability insurance?
- How do insurance companies determine disability premiums?
- Is there a way to save money on disability insurance?
- When can you claim disability insurance benefits?
- Who receives partial disability benefits?
- What are the benefits of disability insurance?
What are the basic types of disability insurance?
- Short term disability insurance policies provide benefit for maximum 2 years and only after a waiting period of 0-14 days.
- Long term disability insurance policies provide benefits that range from a few years to the rest of your life after a waiting period that ranges from several weeks to several months.
You may opt from the 3 basic types of disability insurance coverage:
- Social Security Disability Insurance (SSDI): This federal government provided insurance is for workers with a disability that is diagnosed to last at least 12 months and does not allow them to earn fruitfully. SSDI needs the policy holder (you) to provide medical evidence for the disability. In addition, you are also required to match the medical listing set by Social Security Administration (SSA). Otherwise your residual working capacity will be taken into consideration. Benefits from Social Security include:
- Monthly wage
- Vocational Rehabilitation (if the policy permits)
- Other employment support programs
Click here for more information.
- Employer-Provided Disability Insurance: There are several companies that offer disability insurance policies as part of the employee benefit plan. For individuals who receive long-term disability protection, the benefits may rise up to 65% of the salary for 5 years or till the time the individual reaches the age of 65 years. Sometimes the benefits may also extend to your lifetime. If the premiums are paid by your employers then you will have to pay the taxes as levied on the benefits you receive.
- Individual Disability Insurance: Self-employed individuals seeking disability insurance may find policies with the private health insurance companies. Such individual policies may be comparatively more expensive than group disability insurance policies and the premiums and benefits received largely depend on your occupation, state and country. With such a policy you may receive disability insurance benefits between 50% and 70% of your income compensated.
How do insurance companies determine disability premiums?
- Susceptibility to disability
If you plan to get disability income insurance you must get it as soon as possible because the earlier you get it the better for you.
There are again 2 protection features of disability insurance:
- Non-cancelable: In such a policy the insurance company cannot cancel the policy of the insured except when there has been a non-payment of premiums. You may get this policy renewed every year without your premiums being increased or your benefits being decreased.
- Guarantee renewable: This policy guarantees the policyholder the ability to renew his policy and get the same benefits as before. However, premium rates may go up as decided by the insurance company and this holds good for all other policies in the same class.
Is there a way to save money on disability insurance?
- Elect a longer waiting period before receiving benefits: You can lower your premiums if you can manage enough resources to cover your expenditure during the first 3 months of disability. So start saving.
- Elect a limited/shorter benefit period: This means that you will receive disability insurance benefits up to the age of 65 and not for a lifetime. But do not go for a benefit period that ends before normal retirement age. You might pay lesser premiums but again you will also find inadequate coverage when you need it most.
When can you claim disability insurance benefits?
- A disability arises due to unpredictable conditions. This means that your disability is not from an earlier known medical condition or a chronic illness.
- You have a disability while you are at work and the disability arises as a result of any work related issue.
- The waiting period is over.
Who receives partial disability benefits?
What are the benefits of disability insurance?
- Tax Benefits: If the premiums are paid by you using post tax dollars, then you need not pay any tax on the benefit amount.
- Discounts: While there are employers who offer insurance at a discounted rate, there are others who offer short-term insurance for free and at the same time give employees the option of choosing long-term insurance on discounts.
If you can anticipate the probability of being disabled due to any reason, it is best that you get yourself covered under the disability insurance policy. Ask your agent to explain the policy to you in details. Sometimes a general policy may not cover a critical illness. Purchasing add-on policies at times like these always help. So assess your risks and invest for your future.
- Can I get the benefits of disability insurance if I am pregnant?
- Should I go for mortgage disability insurance?
Total Comments: 64
Posted: Mon Jun 27, 2011 07:55 am Post Subject:
if I go out on these coverage, would I be forced into surgery.
You cannot be forced to undergo any treatment you don't want. But . . . short-term or long-term, disability income insurance doesn't pay for medical expenses such as knee replacement surgery, it pays for lost wages due to defined disabilities.
Posted: Wed Aug 03, 2011 01:03 am Post Subject: Ca Disability
I have been on state disability for 5 months. My employer has "let me go" to replace me. I have a note from my doctor allowing me another 3 months for my chronic colitis condition. can i still receive state disability for the next 3 months? or do i now have to apply for state of ca unemployment to do other type work which i may be able to do
Posted: Wed Aug 03, 2011 05:39 am Post Subject:
Are you disabled or are you unemployed? If you are disabled, you cannot be unemployed (for the purpose of collecting unemployment insurance benefits), because to be unemployed means you are capable of working and actively seeking work. If you are disabled, you are unable to work.
Posted: Fri Sep 02, 2011 06:38 pm Post Subject: Disability Insurance
This insurance reduces disappointment
Posted: Sun Sep 04, 2011 09:32 am Post Subject:
NO IT DOESN'T reduce disappointment.
Posted: Mon Sep 05, 2011 02:44 am Post Subject: total permanent disability
I have short term and long term disability through my employer which pays up to 66% of my salary. In the event I become permanently disabled, does this benefit from my employer end at my retirement age? Can I purchase a policy that would provide coverage past my date of retirement. I am almost 50 and not planning on retiring until I am 65. I realize I may be asking late and my premiums will be high but I cannot risk living off what's left of my 401k and SS if I become totally disabled. Please advise
Posted: Mon Sep 05, 2011 04:46 am Post Subject:
You need to read your contracts to know the answers. Some LTD policies terminate at age 65, some provide a lifetime benefit.
You also need to be aware of the "definition" of disability in your policies, too. They will either be "ANY OCCUPATION" or "OWN OCCUPATION" or a combination of the two. The OWN OCCUPATION policy is less restrictive when it comes to qualifying as disabled.
Finally, if you have obtained these policies through your employment, you need to know if they can be converted to individual coverage upon termination of employment.
Can I purchase a policy that would provide coverage past my date of retirement.
Such policies are available, but must generally be obtained prior to age 55.
Posted: Sun Nov 20, 2011 07:19 pm Post Subject: benefits start
when do my benefits start? I went to emergency room and was admitted for 6 days, do my benefits start then?
Posted: Sat Jan 21, 2012 03:23 pm Post Subject:
Posted: Sat Jan 21, 2012 03:24 pm Post Subject: