The economy is bad enough without having to worry about losing wages due to an injury or a disability. While the federal government offers several excellent programs to those who suffer from physical or mental impairments, many American’s are taking the added step of including disability insurance in their financial plan in order to protect themselves, their family and their assets.
What is disability insurance? At its most basic level, it is a way to replace income in the event of an injury, illness or other disability. Many employers offer short-term disability at no cost to their employees. This insurance offers several weeks of partial income replacement to employees who suffer from a qualifying illness, injury or disability. In many cases, this type of disability insurance simply isn’t enough. Because of this, many employees opt to take out additional insurance, for a price, that will allow them coverage for longer periods of time.
Long-term disability insurance offers employees protection for longer periods of time, often as much as several years. While some employers include long-term disability insurance in their benefit packages, most do not. Employees must purchase these additional protection plans themselves. Employees who typically buy these plans have families or health or medical concerns. While this type of insurance does not replace 100% of an employee’s earnings, it does offer them at least partial income replacement, traditionally 60%.
There are several other types of disability insurance available. These include Own-Occupation Disability Insurance, Income Replacement Insurance and Gainful Occupation Coverage. Each of these types of insurance offer benefits to their policyholders; however, not all policies are applicable to all employees. Discussing these options with a qualified insurance agent is the best way to ensure that an employee is adequately covered.
Disability insurance is something that most people will never actually need to use. Still, it is also something that everyone should include while planning for his or her future.