Understanding the Basics of Disability Insurance

Disability insurance helps replace lost income when you are injured and unable to work. You might need short-term disability or long-term disability. But it all depends on your situation and when you’ll be returning to work.

Types of Disability

Short Term – This coverage replaces lost income up to 80% or more. Coverage lasts 60 to 180 days. The severity of your injury and the recovery time will determine how long you coverage will last. The coverage usually doesn’t begin right away. In most cases, it takes an elimination period of about 10 days before the coverage begins. You can probably get coverage as part of a job benefits package. If not, you can possibly purchase an individual policy.

Long-Term – If the short-term policy ends before you can return to work, then consider a long-term policy. The policy will become active if you’re unable to resume work for a longer period than 180 days. This type of disability covers up to 60% of your salary, but it lasts for a longer time.

Disability coverage is not always included as part of a benefits package. You might want to ask your employer about disability. If it’s not offered on your job, then you can contact an insurance company to discuss coverage. Keep in mind that premiums might be more if you’re currently ill or disabled.