What is covered if I become disabled?

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    disability insurance

    What is disability insurance?

    Disability insurance is a form of insurance that insures a worker in case of a mishap. It pays some or all of the employee’s salary if the employee becomes disabled to work. Disabilities include injuries or accidents at the workplace as well as illnesses or psychological disorders. Many people consider disability insurance to be less important than other insurance forms. However, the risk of getting disabled in the workplace is higher that it seems. According to the Council for Disability Awareness, the average worker has a 30% chance of becoming disabled. Studies have shown that in the US disabling accidents occur, on average, once every second. In fact, about 19% of Americans are currently disabled, and 1 out of every 4 people in the US workforce suffers disabling injury before being retired.

    Some workers may be provided with disability insurance plans by their employees. If your employer does not offer this coverage, or if you are self-employed, you can buy personal disability insurance to protect your earning power and your family from working in case of injury or illness. In fact, private disability insurance covers about 70 percent of a worker’s salary at any age when a disability arises.

    What are the types of individual disability insurance?

    Individual disability insurance policies usually come in the form of either Short term disability insurance or Long term disability insurance packages. Short term and long term disability insurance can protect your financial well-being by replacing lost wages if an illness or injury prevents you from working. Short-term disability insurance provides coverage for a limited amount of time. You receive benefits after a short waiting period of up to 14 days. You are then covered for the length of time specified in your policy, which can be from several months up to one year.

    Short Term Coverage?

    Short term disability insurance policies pay out benefits for reasons such as the following:

    • A lengthy illness
    • A disabling injury
    • The birth of a child

    Long Term Coverage?

    Long-term disability insurance covers injuries and illnesses that prevent you from working. It doesn’t include childbirth. Long-term disability insurance provides coverage over a longer period than short-term disability coverage. Long term disability claims typically take up to 90 days to process, sometimes longer. After your claim is settled, you can receive benefits for several years, until you reach age 65, or until you recover. Some policies pay benefits for the rest of your life, although this varies by policy and by an insurer.

    The most common long-term disability claims are:

    • Musculoskeletal/connective tissue disorders (back pain, osteoarthritis)
    • Cancer
    • Injuries/poisoning
    • Cardiovascular/circulatory disorders (heart attack, coronary artery disease)
    • Mental disorder
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