Understanding Disability Insurance | An Overview of Your Options

If insuring your paycheck is something you’re interested in, disability insurance is something you should consider. In an instant, a severe car accident or any number of events could impact your ability to work. Though a select group of states require that employers provide at least short-term disability insurance, most do not. By opting for disability insurance, you’re protecting your financial future if anything were to ever go wrong.

What Does Disability Insurance Cover?

Plans differ, and not everything covered on one plan will be covered by another, but generally disability insurance covers anything that makes an individual unable to work. This includes maternity leave, surgery (and elective surgery, in some cases), and your inability to work due to injuries sustained out of work.

Most plans currently available cover individuals starting at age 18. This gives workers of all skill levels and positions the ability to protect their paychecks in the event of any short-term leave.

Types of Disability Insurance

There are two basic types of disability insurance: short-term and long-term. Depending on the reason for your work leave, whether a minor injury, maternity or paternity leave, or an invasive surgery, you have the options to protect yourself and your paycheck.


Short-Term Disability Insurance

Short-term disability insurance policies today vary in how much they cover. For most, 80% or more of your gross income could be replaced over a short period of time while you’re on leave generally between 60 and 180 days. This coverage ensures that you and your family do not go without while you recover from a short-term illness or injury that may include a hospital stay, such as pneumonia, or while you spend the first few months of life with a newborn.

Keep in mind that, depending on your place of work, the disability insurance you can apply for will differ. While some businesses may not offer a workers’ compensation option or a maternity leave, others do. Be sure to discuss with your employer what benefits may be included in your plan before an accident occurs.


Long-Term Disability Insurance

In the event that your short-term disability insurance runs out, or you go over your 180-day allotment, long-term disability coverage may need to take over. Unfortunately, unlike the short-term disability plans that can, in a few cases, replace almost your entire paycheck, long-term coverage may only cover you for 50% of your salary with only a few plans providing as high as 80%.

While the payback from long-term disability insurance may not be as high as you can receive with short-term, long-term plans generally last much longer than their shorter counterparts. Instead of lasting only a few weeks or a few months, a long-term plan can last you any number of years depending on the policy design.

How to Choose a Disability Insurance Policy

When injured unexpectedly or getting ready for a child, deciding which disability insurance plan is best for you can be difficult to figure out on your own. Insurance Designers of America can connect you with some of the best insurance specialists in across the nation to help you find the policy that fits your unique needs.