Usually, we focus all of our time and research finding the right kind of homeowners or car insurance policy for us. We often overlook the possibilities of disability insurance, when we should be looking for it first. If you were to have an accident or become injured, how would you bills get paid for your home, car and other expenses? Having the right disability insurance plan will ensure that you are covered in the event of an emergency.
Disability Insurance Checklist
If you have never heard of disability insurance or if you are looking into your personal coverage plan, take into account the following steps.
- Check if your employer offers disability insurance plans
- If your employer has disability insurance coverage plans, confirm its limitations, coverage and lengths.
- Take into consideration how you would pay your bills if you became injured
- Consider the effect that a possible injury would have on your family, children and others that depend on you financially.
Types of Disability Insurance Plans
There are two main forms of disability insurance coverage plans. Each of these plans offers distinct benefits and terms that are important to understand when you are considering disability insurance.
Short Term Disability Insurance
A short-term policy typically replaces up to 80% or more of your gross income for a short period of time. This time period can range anywhere from 60 – 180 days, depending on your specific policy. You will start receiving the benefits of this plan up to 14 days after it is initiated.
This is the most common policy that is offered by employers. Many employers subsidize coverage that they give. This means that the benefits are taxable.
Most people tend to choose this disability insurance plan because it can be beneficial for the following predicaments:
- Disabling injury
- Giving birth to a child
Long Term Disability Insurance
Long-term disability insurance coverage is beneficial to those who have an injury or disabling factor that will keep them out of work for 180 days or more. Long-term disability insurance only gives you back 60% of your salary, but it can last for many years at a time.
These claims can take up to 90 days to process, which means you will have to wait longer to receive your benefits. Each policy is different, so be sure you know how long it will take you to receive your benefits before signing the papers.
Some people who have long-term policies have claims for:
- Connective tissue disorders
- Long lasting injuries
- Cardiovascular disorders, such as heart attack
- Mental Disorders
How to Choose the Right Policy For You
Short term and long term differ immensely. What is important to understand about these two policies is that short-term premiums are often much cheaper than long term. But if you have an injury or illness, it may not be enough. Take into consideration your current health status and speak with a professional and your employer before you make a decision on the right plan for you.
It is very important that you protect your income in case of an emergency, but choosing the right policy can be tricky. Of course, it is nearly impossible to know just how long you will be out of work if you have encountered an accident, but it is important to have some kind of coverage to get you by. A professional insurance agent will be able to help you make the right decision.