Disability Insurance Awareness Month
When you consider the month of May, you may picture sunny days, spring flowers blooming, or graduation ceremonies, but May is also Disability Insurance Awareness Month. Have you pondered why purchasing this insurance is advantageous?
What is Disability Insurance?
Disability Insurance provides a safety net for policyholders who can not work and earn a living after suffering an illness or injury. Private insurers offer coverage through disability insurance products. Private plans can vary in their stipulations toward the insured person. Be sure you know what qualifies you to receive payments should you become injured or ill. Some private plans only require the individual to prove that he or she cannot continue employment in the same type of work before injury or illness.
Several factors impact a person’s premium payments. Before selecting a policy, ensure you examine the details of your coverage. Here are a few factors to analyze. The elimination period refers to the time between becoming disabled and receiving payments. Sometimes it is called the qualifying period or waiting period. A quicker elimination period could result in a higher premium. A policy’s benefit period determines the length of time the insured person receives benefits. Certainly, the longer the benefit period, the higher the premium. Another variable lies in the policy’s definition of disability. Read thoroughly to determine if the policy’s definition meets your meaning and know if you are comfortable with the policy’s strictness toward that definition. Additionally, the age, gender, health, and occupation of a person can also influence the premium cost.
Short-Term or Long-Term Insurance?
There are advantages and disadvantages to both short-term and long-term disability insurance. Short-term insurance can be costly to the average worker, so people often acquire it through their employer in a group plan. It covers an illness or injury that prevents a person from performing work responsibilities but does not cover workplace injuries. Worker Compensation is responsible for work-related accidents. Short-term and long-term policies both cover up to 60 percent of your pre-tax income, but short-term insurance only lasts up to one year. Long-term insurance benefits can last two, five, or ten years or until retirement. Experts recommend obtaining short-term disability insurance to supplement long-term insurance. The waiting period can be a few days for short-term insurance and can help cover lost income until the long-term insurance benefits period begins.
What is another form of disability insurance?
The Social Security System also provides disability insurance for those who qualify under their policies. The government offers Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) options for eligible people. The Social Security System’s regulations tend to be more strict than private insurance. The direst of consequences qualify individuals who apply for these forms of disability insurance. Individuals and specific family members remain eligible to receive SSDI benefits if they meet certain conditions. Those requirements include the person must have worked for a long time, worked recently, and paid Social Security taxes on earnings. SSI issues payments to adults and children who meet conditions for a qualifying disability and have limited wages and resources. Both options have identical medical requirements but different nonmedical prerequisites. If a person qualifies with a medical condition anticipated to last at least one year or result in death, then monthly benefits are paid.
If you found this article informative, please read about life insurance riders.
Life Insurance Questions?
We hope that this information on disability insurance is useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
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