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Disability Insurance

The details about disability insurance

An illness or injury that leaves you unable to work, even for a short period of time, can be devastating financially. Add not working on top of medical bills and you’ve got a recipe for hardship. Fortunately, you can protect yourself to a degree with disability insurance.

What is it?

Disability coverage is a type of insurance that pays you for a period of time if you are hurt or get sick and cannot work. Your disability coverage is based on your income and seeks to replace part of it until you can get back to work. Employers often offer disability policies as part of a voluntary benefits package.

Who is it for?

Anyone can benefit from having a disability policy, but it is especially important for people who would face serious hardship if they were out of work for more than a week or two. That includes those who are self employed and those who support others on their incomes. Disability coverage also is a good idea for people with jobs where injury is a risk, such as construction workers.

How does it work?

If you are injured or become sick and your doctor certifies that you will be unable to work for an extended period of time, you can make a claim on your disability period. After a waiting period is satisfied and after you have exhausted all paid leave at work, your policy will start paying you, usually weekly. Most disability policies pay anywhere from half to two-thirds of your income up to the time limit contained in the policy.

Types of policies

Short-term and long-term disability are the two types of disability coverage. Short-term disability usually covers you for anywhere from a few weeks to up to six months. Long-term disability policies may continue indefinitely or they may have a cap after a couple of years. Typically, if you are permanently disabled, you will be able to qualify for government disability benefits.

Major benefits

The big benefit of disability insurance is the payments you receive while out of work, which you can use to pay your medical and other bills.