No one ever wants to find themselves in a situation where they need to use disability insurance, but that doesn’t mean they don’t need it. People have insurance for all sorts of things, yet, they often overlook insuring one of their biggest assets, which is their ability to earn money. There are a lot of factors that show that the risks of disabling injuries that impede one’s ability to work are a lot higher than you’d think. According to Keep Moving Care, a 30-year-old person is 4 times more likely to become disabled before the age of 50 than to die. This high probability highlights the importance of protecting your income against the risk of disability.
This insurance provides you with a sum of money for the time you’re not able to work. The question to ask yourself is whether your savings and assets can keep you afloat if you’re not able to work for an extended period of time? Chances are the answer is no, which is why there is short- and long-term disability insurance available.
Short-Term Disability (STD)
As the name implies, short-term insurance is for temporary injuries, illnesses, or conditions, such as pregnancy. Short-term insurance offers you a lump sum amount to replace part of your lost wages.
Qualifying for STD may depend on how long you’ve been employed in a company and whether you’re a full time or part-time employee. As long as you meet the basic requirements, almost all employees can qualify for STD. Since STD only covers a limited amount of time, most people prefer long-term disability insurance as it’s also more encompassing.
TIP: Aren’t exactly sure what disability insurance is? Check out the BREEZE website for the low-down, including what it is, how it works, and what it is worth.
Long-Term Disability (LTD)
LTD plans provide you with a monthly partial payment to make up for your lost income. These plans may also be purchased separately from an insurance agency if your employer doesn’t offer a plan or if you’re self-employed. It’s safe to assume that even if your job offers workers’ compensation plans, it usually isn’t enough, which is why employees look into other supplement plans.
There is a defined period of time for receiving benefits; usually between 2 and 10 years, which is the main difference between LTD and STD. Other types of plans can continue until an employee reaches 65 years of age and there are some plans for life. Like any other type of insurance, the more monthly premium you pay, the more coverage you will receive, but you can only enroll in one or the other. Employers can protect their employees using this useful service, without spending too much money by enrolling their staff in group insurance. Not only is this more cost-effective than individual coverage, but it also boosts your employees’ satisfaction. You see, employees look for more than just an attractive salary. They want to feel secure and feel confident that their boss and company care about them. By enrolling in group insurance, you’re sending the right message to current and future employees.
Let’s have a look at other reasons why disability insurance is important for you.
Receive Money When Needed Most
Being out of work for any period of time is stressful, especially when it’s due to injury. You have medical expenses to worry about, not to mention your daily expenses. Without insurance, how are you going to pay for them? You need something to fall back on, that something is disability insurance.
Tax-Free
Any benefits you receive from the insurance are exempted from taxes. As long as you’re paying your premiums on time, there should be no complications nor any other expenses to pay to receive your benefits.
One Policy Covers Different Jobs
After an injury or illness, you can go back to the exact same job you were doing. But many people might have to perform different duties than they used to. For instance, if your job involved a lot of physical movement, you might have to switch to a desk job post-injury. It doesn’t matter because your insurance remains as it is and doesn’t change when performing another job.
It Covers What Workers’ Compensation Doesn’t
A high percentage of accidents and illnesses happen outside the workplace. Workers’ compensation only covers work-related accidents. With disability insurance, you’re covered from other injuries or illnesses that occur outside the workplace.
Up to 70% Coverage
Due to the changing economy, most companies will only pay around 40% of the lost income under workers’ compensation. With a supplement disability payout, you can receive around 60% to 70% of that lost income.
Disability insurance is the only type of insurance to protect you against income loss. Even if you have no money coming in, your bills will still have to be paid. If your job doesn’t provide a plan, or if their plan doesn’t offer sufficient coverage, the services of disability insurance companies will prove to be very valuable.
I’m a 20-something stay-at-home mother and wife. I have an amazing husband, a beautiful daughter, two loving dogs, and a lazy cat. I wouldn’t change my life for anything! I love to read, listen to music, cook and blog!
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