Disability insurance is a type of coverage that replaces a portion of your monthly income if an injury or illness prevents you from working. It provides financial security for you and your loved ones who can rely on your most valuable assets – your ability to earn paychecks.
You can use the disability insurance benefits you get from your policy, from monthly bills and out-of-pocket medical expenses to child care and groceries. You can also hear disability insurance as disability income insurance or income protection insurance.
What Disability Insurance Covers?
It is a very common question from people that, what does disability insurance cover? Disability insurance covers injuries and illnesses that limit your ability to do what is expected in the workplace. May be it sounds pretty straightforward, right? Well, there are still a lot of misconceptions about what is considered a disability and what is not.
For example, what does the word “disability” mean? Often it’s counted to accidents and rare birth defects. Those impossible, tragic events that we believe just can’t happen to us. But this is not the only reality.
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More than 25% of today’s 20-year-olds will experience a disability that prevents them from working for at least three months after retirement. And when you consider the most common causes of long-term disability, it’s not really surprising. See for yourself here:
- Back pain
- Heart disease
Yes, you check it right. The Council for Disability Awareness reports that 90% of claims filed for long-term disability stem from medical illness, not a physical illness.
To be clear, this does not mean that injuries, such as sprains, and strains of muscles and ligaments are not disabled. However, what this means is that the opportunities for people with disabilities that may prevent you from earning an income are much wider than most people realize.
How You Can Get Disability Insurance?
When shopping for disability income insurance, any coverage you get will ultimately come from an insurance carrier. But there are different ways of coverage that you can consider.
One option is to seek coverage as an individual. Disability insurance is available for individuals who work with a licensed independent insurance agent or go directly to an insurance company.
When you buy a separate policy, you own it as long as you pay the premium. Also, the amount you pay is usually locked. This will not change if you do not choose more coverage. Personal plans are also affordable. You do not lose coverage by changing jobs or losing your employment.
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Another option is to get disability insurance through work. Often, group disability insurance coverage is only available if it is offered to you by your employer or your association.
Since many employers offer group disability insurance as an employee benefit, they may pay some or all of the premium costs. Problems ensuring group disability planning. This means that if you apply for coverage, you are automatically registered. There is no underwriting.
The biggest disadvantage of an employer-sponsored policy is the possibility of losing coverage. This can happen in two ways.
First, if you do not work for a group plan sponsoring employer, you will lose your disability insurance. This type of coverage depends on your employment.
Second, companies conduct annual renewals of their benefits, including group disability insurance. Following this review, there is no guarantee that the plan will be renewed. Employers can only decide not to continue providing disability insurance.
While it is easier and cheaper to participate in group disability insurance through work, personal coverage is stronger and more reliable. This is why buying an individual plan is usually the recommended route, even if you already have group coverage.
There are lots of insurance policies are available and disability insurance is one of them. But many people don’t have clear idea on it. People ask, what does disability insurance cover? For their convenience, we try to discuss in this article what actually disability insurance covers. Hopefully, our small effort will be helpful for all of you. Thank you all.