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Disability Insurance and How it can Save You


Americans have little to no understanding in regards to disability. Statistics show that more than 50% of workers 35 years or younger will suffer a disability for three months or longer before age 60. The truth is disability can affect anyone, and it can happen when we least expect it. The chances of suffering a disability are increasing by the day. The unfortunate fact is most people assume they cannot suffer a disability. Realistically, a disability is not just caused by an accident but can also be caused by an illness that can end up being a long-term or a life-threatening disability. Stroke is a leading cause of long-term disability. According to the Center for Disease Control, someone in the United States has a stroke every 40 seconds. Illnesses such as heart disease or cancer, compared to freak accidents, account for significant long-term disability.


Disability insurance is a policy that protects your income if you get disabled and cannot work. To qualify for disability benefits, the doctor has to authorize your inability to do any meaningful activity or work. Additionally, your condition must be among the medical conditions listed in the social security disabling illnesses.

The insurance gives you a monthly income depending on whether you are on long-term or short-term disability. In America, employees can get disability insurance either through the government or private insurance companies. 

The possibility of getting injured or developing an illness is high, and it is essential to get disability coverage. It falls under two categories, which are Long-term Disability and Short-term Disability.

Short-term Disability policies may pay for up to two years.  Most last for up to a year and replace 60-70% of your base salary. While long-term Disability can last from a few months to years, replacing 40-60% of your basic salary. Both replace your income due to a condition that keeps you out of work, and you cannot perform your regular duties. Most employers offer disability insurance to employees. However, it is essential to get individual insurance. Disability insurance is not for people in a specific career or scope of work but for anyone who relies on their income. Protecting your future earnings is a means of investment if there is a turn of events beyond your control. Individual disability insurance has tax-free benefits to the policyholder, and it is also more comprehensive, where a person can tailor the policy for a specific profession. 

The advantage of group disability insurance is that the premiums are low, and you only pay part of the premium. In contrast, the employer pays the other part with the possibility of covering personal expenses. The process is also not intensive and stringent compared to private insurance companies. The downside is that it is not transferable once you change employers or jobs. 

Disability insurance can not only provide income replacement but, in some cases, covers student loans. 


How does Disability Insurance Work?

Like any other policy covering a specific loss, disability covers lost income due to an illness or injury that causes a disability to an individual. However, the amount reimbursed is a portion of the base salary, depending on whether the Disability is short or long term.

There are pre-qualifications to receiving the payments, whether from the government plan, employer, or individual insurance policy.


Do you Qualify for Disability Insurance Benefits?

To qualify for the payment benefits, a person must have an injury or illness that has created a limitation for them to perform their job optimally. The application for disability benefits may take up to six weeks. A medical exam is attached to the paperwork as evidence of the Disability. 

An insurance company will want access to your medical records to verify your inability to work for a certain period or authorization to take time off work. In addition, the medical records will support your claim to determine whether the insurance company will compensate or contest your claim.

It is essential to know that you may have medical qualifications and still not get approval for disability benefits depending on the policy limitations.

With group disability insurance, your employer will have records showing a pre-existing condition you might have and how long you've had it. It is wise to have a copy of insurance provided by your employer to know what you signed for. Disability insurance claims fall under either any or own occupation. 

Any occupation means that you cannot perform your current job duties based on your education, training, or experience. On the other hand, own-occupation claims mean you are unable to work in any job. 


Common mistakes that disqualify disability insurance approval

There are numerous reasons why you can be disqualified to receive disability benefits. For starters, not disclosing everything about your medical condition, pre-existing or not. Having a pre-existing condition does not disqualify a person from receiving disability benefits, but the question is whether you disclosed it to the company or doctor. The policy typically has a waiting period, and in case you file a claim within this period, depending on whether there was disclosure of a pre-existing condition, it will determine whether you receive the benefits or not.


Also, not understanding the definition of terms on the policy can end up being a downfall, being disqualified, or being shortchanged. It is essential to read and understand the terms and definitions of your policy and always have a personal copy. For example, you might have signed up for only long-term disability benefits while, in essence, you need short-term benefits. Additionally, providing pertinent information to your doctor by not giving accurate details of your condition during your consultations or treatments could delay your benefits or not get qualified. As stated earlier, medical records are the foundation of any claim. It supports your claim because there's documented evidence of your condition. The information you give the doctor should be as detailed and accurate as possible. The medical report should back your limitations from the job. Give the doctor honest and detailed information about your conditions without making assumptions. On the other hand, you can keep a diary, record how you feel daily, and present it to your doctor.


How Short term disability Insurance can benefit you

Many Americans have a short-term disability, whether it is an injury, illness, or pregnancy that will keep them away from work. Short-term disability policy protects both the worker and employer by replacing the worker's income if they cannot do their job due to the injury or illness. The employee files a disability claim and receives an amount specified by the policy plan. The Short-term is temporary and lasts between up to six months. It can provide a much-needed safety net to a family if the breadwinner sustains an injury that will put them off work, you'll be glad that you took time to understand and get disability coverage.

Most employers cover workers for Long-term Disability unless they are within states that are mandated to offer Short-term Disability insurance. Always seek clarification to know how your employer insures you in terms of Disability. If not available through the employer, you can add it to your other insurance policies. If you are in business, you should purchase disability insurance or add-on to your health insurance plan.