Disability Income Insurance

You are the highest value asset that you own. With this in mind, it is important to prioritize and protect yourself in case anything goes wrong. Your ability to earn money is vital to pay for your living requirements, such as a mortgage, rent, retirement. If you cannot earn money due to a disability such as an extended period of time for an injury or illness, then disability income insurance can help to provide an income if you cannot work.

For anyone that relies on a regular salary or income then it is wise to protect yourself with disability insurance. While you may feel fit and healthy, and having prolonged sickness seems far-fetched, there is always a chance that you may have a disability that keeps you off work for a few months or beyond. The time when you cannot work can significantly impact your finances, but with insurance, you will have peace of mind that your bills can be paid if you are unable to work.

Do I need disability income insurance?

If you require or rely on an income from a form of work, then it is wise to protect yourself and your income with disability income insurance or income protection insurance. If your savings only cover your expenses for a month or two while you are off work, then disability income protection can give you the support you need. The insurance can help to pay bills and meet your financial commitments until you are able to work again.

Another reason why disability income insurance might be important to you is if you are responsible for others. If you have loved ones who rely on you and your support, then monthly disability income benefit not only offers a lifeline to you, but to your children, family and loved ones too.

It is important not to assume a disability will not affect you. Difficult situations can happen to anyone, anywhere, but with insurance, you can help to limit the financial stress that a disability can cause.

Short-term disability

Depending on your financial situations, you can choose between two types of disability insurance, short-term, and long-term.

Short term will usually have a maximum period of benefits of around two years. With short-term disability insurance, you may receive a significant percentage of your income tax-free, but the insurer will stop paying these benefits after two years or so. As the benefit period for short-term disability is short, and your disability lasts longer than two years, then you may lose out financially.

How to get short-term disability insurance

In fact, some employers may offer short-term disability insurance as part of their benefits package. It may be wise to check with your employer where this protection applies to you. What is important to remember is that if your employer does pay the premiums for your disability insurance, then the disability income may be taxable.

If employers do not pay the premiums for short-term disability insurance, then they may offer a plan that is run by a third party where you can customise the plan to your need. In some cases, the benefits payment may need to be shared between you and your employers.

You can also go directly to insurers for short-term disability insurance if your employer does not offer it as part of their benefits package.

When can you use short-term disability?

Short-term disability insurance can be used for a range of medical purposes; from illness and injury, medically necessary surgery and during pregnancy, childbirth recovery and family leave.

Short-term disability for pregnancy and maternity

With insurance it is possible to receive short-term disability pregnancy benefits, however for most insurers, you must have taken out the policy before the disability or pregnancy arises. With this in mind, it is wise to take out income protection insurance before pregnancy.

For maternity leave, then using a collection of short-term disability, unpaid leave, sick leave and vacation days is common. Often during pregnancy and maternity leave, only a portion of your salary will be paid under short-term disability (std) benefits. For example, for short-term disability California, you can also supplement this with paid family leave, however not all states will allow std to be used for pregnancy, birth, recovery, and family leave.

How does short-term disability work for maternity leave?

Maternity leave is actually the most common reasons for a payout of disability income benefits. With most policies, you can receive a portion of your income for up to six weeks after giving birth. If there are medical complications or you have a cesarean section, then your benefits may be extended however this will depend on your insurer and their terms.

You may also receive benefits before birth if your doctor submits evidence that you are unable to work.

As with other disabilities, there is a maternity elimination period std; this will mean there may be a wait between the birth and the beginning of your receipt of benefit payments. If you are purchasing the std policy directly, then you may find higher premiums for shorter elimination periods, whereas you may find cheaper policy premiums by choosing a more extended elimination period.

Can I get short term disability after surgery?

Most policies will offer benefits for surgery as long as the operation is medically necessary. However, understanding std benefits when it comes to surgery can be confusing. It is essential to ask your policy provider; ‘how does short-term disability work for surgery?’ when taking out the policy. If the surgery is medically necessary and is not a pre-existing condition, then your plan will usually cover you.

If you are choosing elective surgery or wondering how to get time off work for cosmetic surgery, then policies will often decline your request. If you are wondering of how to get short disability approved for elective surgery, then you may be able to ask your insurer beforehand about their coverage options, or they may include elective surgery if you have been with the insurer for a more extended period.

How long does it take to get short term disability check?

With every policy, there is usually an elimination period in place. The waiting period for short-term disability will vary depending on your insurer. In some instances, this qualifying period will count as your deductible, meaning you are responsible for your own care and costs during this period. For the short-term cover, this period may last a week or beyond, depending on the policy and the deductible you choose.

Long-term disability insurance

As an alternative to short-term disability insurance, you can find more protection with long-term disability insurance which can give you a benefit period of a year up to the age of 67 with most insurers. Employers will often offer short-term insurance, but you may wish to consider taking out long-term disability insurance for more coverage to protect you if you are ill for an extended period.

How much should I pay for disability insurance?

The cost of disability insurance can vary depending on your insurer. Some of the key factors which can make long-term disability insurance cheaper include your age. For younger individuals, long-term disability insurance tends to be less expensive. As you age, premiums may rise.

You can also lower the cost of disability insurance by choosing a more extended elimination period. This is the time between the onset of sickness or injury and when you can begin to receive the benefits.  If you want a longer period, perhaps if you have sufficient savings in place, then your insurer may lower your premiums.

One way to ensure that your premiums do not increase through the policy duration you may be able to choose a non-cancellable contract. As the name suggests, the commitment is continual, and you will not see an increase in premiums or a reduction in benefits.