Disability Coverage

Disability Coverage

Disability insurance policies are designed to pay part of your wages should you be injured in an accident or are not able to work because of illness.

Here are two types of policies available: long-term disability and short-term disability.

Short term disability pays a portion of your wages should you be out of work due to injury for up to one year. Some employers pay for this benefit for their employees, some offer it for employees to purchase.

If you have a pre-existing medical condition, the time to enroll is during the initial enrollment period when a medical exam is not required.

Replacement of wages is only partial; insurance underwriters, as well as your employer, want you back at work as soon as possible. Usually there is a waiting period of 14 days in which you are not going to receive payment.

Long term disability policies are purchased to replace what your potential earnings would be from the time you become disabled until age sixty five when Medicare would be available.

For instance, if you are fifty five years of age and make $40,000 per year, you have to purchase a policy for $400,000. You are not able to get a long term disability policy if
(1) you are or are soon to be pregnant,
(2) make less than $18,000 per year,
(3) are unemployed, or
(4) you are required to carry a weapon for your job.

Typically, the waiting period for long-term insurance to kick is at least sixty days and as much as a year.

Disability insurance is an important aspect of your overall insurance coverage plan, and if your employer offers it as a benefit you have to definitely consider it as a wise investment.