General Insurance
One thing that brings many people pride and joy is their ability to provide for their family. Thinking about how one would provide for their family if they were injured and could not work is not something a person regularly does. This type of situation could financially cripple a family. While there are some government benefits for disability with Social Security, the qualifications can be strict and the payments may not cover a family’s expenses.
What is it?
Disability insurance coverage pays a percentage of a person’s prior income if they were to become disabled and could not work for their own wages. For each plan there are different definitions of when someone is disabled, and may have different benefits. Generally if you become injured and cannot work, the plan with send payments on a set schedule to help replace the wages you made prior and keep your household afloat while you gain back your health and work on being able to return to work. Disability insurance coverage can be purchased as a personal plan, or may be offered by an employer. It is often classified as short term, or long term disability insurance.
How does it work?
One thing that is important to review on each disability insurance policy is its specific terms. There is often a waiting period that can last several with the more common long term disability insurance coverage, that must go by before benefits can be paid. There are also different definitions of what disabled means under these plans. Some classify disabled as meaning you cannot perform your most recent occupation, while some classify it as not being able to perform any occupation you are seen as reasonably able to, based on education, skill, etc. This means that if a construction foreman were injured and could not stand for long hours, he may be forced to take a job performing data entry. They also will have different stipulations regarding their right to cancel or non-renew the policy.
How much do you need?
There are many things to consider when purchasing disability insurance coverage. One main thing people consider is the percentage of their prior wage they will receive. If the family has two wage earners, than they may not need as high of a percentage as someone who only has the one income to live off of. Also, if a person is single, they may need more in home help if injured and may look for a policy offering additional benefits for these expenses. You may also want to review the conditions regarding the waiting period of plans that an employer may offer. It may be possible that they are offering two types of plans, a short term disability insurance coverage options as well as a long term one. It is possible that an individual may require both plans.
Expert Tips and Info
A person may think that through government plans, their income would be protected if they were to become disabled. While there may be some coverage under these plans, it may not be enough to not cause financial distress to their family if there were not able to bring home wages for their occupation. Workers compensation is often looked at as disability insurance coverage, but it only provides benefits if a person is injured on the job. It would not cover if the injury occurred in an auto accident or while participating in sports. Also Social Security coverage only pays a set amount in the event of disability and may be not be enough to cover the expenses of a particular family.