Disability Insurance

Insurance by definition is a means of protection against loss. What is a more dramatic loss than the loss of a paycheck. An injury outside of work can make working in your current position impossible. An employer can't afford to pay an employee who is not working. The result for too many people is the loss of income and a mounting pile of bills.

The answer is disability insurance. It is sometimes referred to as accident insurance, however, in reality accident insurance is slightly different. Many employers offer short term disability insurance plans as part of their benefits package. Some businesses even offer long-term disability. Many other companies offer the option to buy into these plans.

Some people make the mistake of assuming worker's compensation benefits will cover any need they might have for disability insurance. The problem with this thinking is that in order for worker's compensation to pay any claims the injury must occur at work. A car accident on the way to work, or a skiing accident during the weekend are not covered.

If you have enough in savings to cover an extended injury or illness time then disability insurance may not be necessary. However, if you live paycheck to paycheck like many people, disability insurance could mean the difference between paying the bills or not.

Short term disability insurance is important for those injuries that will only require a short time away from work. This will pay a portion (usually between 50% and 66 1/3%) of your salary while you are unable to work. Short term disability insurance benefits are usually paid up to six months. Benefits usually kick in immediately for serious injuries. It may take a little longer for illnesses and less serious injuries because it must be proven that they are disabling or severe enough to render you unable to work.

Long term disability insurance takes over where short term leaves off. It will continue to cover a portion of your salary as long as needed (until age 65.) Most long term disability insurance policies have provisions for partial disabilities. If a person is able to return to work, but at a lower pay grade, then the disability insurance will help by paying a percentage of this new pay rate. Long term disability insurance will insure that there is income to cover the bills and allow the opportunity heal and recover. If a return to work is possible this insurance will help transition back to a normal schedule.

Disability insurance really is a protection against loss. It prevents a total loss of income should an illness or injury make it impossible to return to work. For anyone without the savings to withstand an extended leave from work, disability insurance should be a consideration.