If humans are given sufficient time to prepare, they can anticipate and plan for life pretty well. Occasions such as marriages, child birth and retirement require a significant amount of time and other resources. However, it’s difficult for most people to imagine – let alone save for – major, unexpected life changes.
For instance,a lot of people don’t know how to get disability benefits, which is why injuries and serious illnesses affect millions of Americans each year. Most of the times, they come without warning. While the majority of working adults in the United States have some form of health insurance or health coverage,most lack disability insurance coverage.
According to the Bureau of Labor Statistics, only 39% of American workers had short-term disability insurance and 33% had long-term disability insurance up to a few years ago.
What Is Disability Insurance?
Disability insurance, also known as protection insurance disability has two forms.
- Short-term disability insurance
- Long-term disability insurance
Policy terms and coverage vary by issuer.Below is a general overview of the key differences between the two:
Short-Term Disability Insurance
Short-term disability (STD) policies provide income protection for people unable to work due to certain disabilities. But how do you receive disability benefits?
Every short-term disability claim is subject to a short term elimination period that can typically last for one to two weeks. During this time, the policy holder does not receive benefits.
After the elimination period, the policy holder receives benefits for a consecutive period of disability that usually last for no more than 26 weeks. The benefits can vary by policy and occupation, but they generally range between 50-70% of pre-disability income.
Short term policies may not cover income loss that happens due to on-the-job injuries. On-the-job injuries are the province of workers’ compensation insurance.
Long-Term Disability Insurance
Long-term disability (LTD) policies provide protection for workers who are disabled for longer periods of time. These too have intervals, usually much longer when compared to STDs, during which there are no benefits paid. The elimination period in this case can range between one month and half a year, but sometimes it can also go up to a year to even two.
LTD policies also have an accumulation period that stretches twice the length of the elimination period. During the accumulation period, the policy holder must accrue sufficient cumulative disability time to exceed the elimination period. It is not necessary that the policy holder is continuously disabled during the accumulation period, provided the elimination threshold is met.
When the elimination period is met, the benefits are payable either until the policy holder is no longer considered disabled or for the duration of the policy. Some policies last for a set term ranging from two to ten years. Although, many of them remain in force until the policy holder reaches the age of sixty five.
Some LTD policies can even continue after the age of sixty five, provided that the policy holder keeps working. Income replacement usually goes to 70% of pre-disability income and it may be customizable.
What Are the Benefits of Disability Insurance?
A Price for Every Life
The benefits that are paid by a disability policy aren’t intended to cover your entire life’s expenses.They’re meant to cover the expenses you would have while your disability forces you to work. A disability insurance policy takes care of your beneficiaries after you’ve passed as well.
If your disability isn’t fatal and you’re forced to miss work, your dependents will still need food. A disability insurance policy pays your benefit when you’re disabled, covering you right when you need to be covered.
Focus on Recovery
Recovering from your disability can be stressful and difficult. This stress you feel makes your recovery time more agonizing than it needs to be, and in some cases, it could even make things much worse. A disability policy removes some part of this stress. You can focus on your recovery without worry.
One Policy, Many Jobs
Disability insurance policies aren’t only for your current job. Even if you transfer from one job to another, your policy will remain as stable and reliable as it was when you got it. If you’re switching job titles and working a lot of temporary jobs, you don’t have to worry about losing your insurance.
You don’t even have to pay higher premiums.This aspect of disability insurance policies is great for entrepreneurs who start new ventures very often. A different job does not have to mean a different insurance policy!
You don’t need to worry about separating a share of your disability benefits for tax purposes. When you receive benefits from your disability insurance, you can bet you’re getting them in full.
Usually, benefits from disability insurance, are completely tax-exempt as long as you’ve paid your premiums. This way you can use every penny available.
You Don’t Need to Worry About Rehabilitation
If you miss work because of your disability, you need to cover more than your regular cost of living. Most disabilities require immediate medical attention, which in turn means a lot of hospital visits, expensive medicine, home care and many other types of expenses.
Insurance can help you pay for your rehabilitation.This saves you from other recurring expenses. No person should go into debt just because they’re disabled and a disability insurance policy makes sure you don’t.
Apart from the many benefits disability insurance provides, the greatest benefit it provides is peace of mind. With disability insurance, you can know that you and your loved ones won’t have to go without resources when you’re disabled.
The difference between knowing how to get disability benefits and not can be life-changing for some people.
If you have been denied benefits under a disability insurance policy, Kahn & Associates can help. We will work tirelessly to make sure you get the insurance benefits you paid for and we do not get paid unless you win.
To learn more about your rights under ERISA and your disability policy, call our FREE Disability Hotline at 1-866-469-7734 to speak with one of our friendly disability rights advocates or
Fill out our FREE Disability Case Assessment form and one of our representatives will contact you immediately