If you’re like most people, you probably underestimate your risk of disability. It’s not your fault!
According to a study by the Council for Disability Awareness, only 10% of individuals accurately estimate their chance of disability. The reason being has many factors affect your probability of becoming disabled, including age and gender. Suppose you know that your employer offers disability insurance and is available at a low cost through a group policy. In that case, you’ll be able to make better decisions about saving money and planning for the future.
Different Definitions of Disability
How a policy defines the term “disability” significantly impacts your ability to collect benefits. The primary coverage types are “own occupation” and “any occupation.”
- “Own occupation” policies pay disability benefits if you are unable to perform the duties of your job. For example, a lawyer who is disabled and can’t work as a lawyer would still be eligible for disability benefits—even if they are well enough to work in another field.
- Those who follow the “any occupation” policy must adhere to stricter rules and regulations. To receive disability benefits, you must be unable to perform any “gainful occupation.” So, if you’re an accountant, you could lose your help if you were allowed to work as a cashier instead.
Two Major Types of People With Disability Insurance
- Covered by the Employer/Company- If you’re in this category, consider yourself lucky. Typically, large employers offer short- and long-term disability policies at no cost to their employees. While terms vary, 50% to 60% of pay benefits are typical for an employer-provided LT disability policy. If you are not paying a premium on the disability policy, you will be taxed on the income you receive when collecting disability benefits.
- Self-employed- This group is at risk of not having adequate disability coverage or not having any at all. Individual policyholders can opt for a 13- or 26-week waiting period within the group policy. The premiums you pay can be reduced by waiting longer between claims. Individual members can choose to have partial disability coverage. These policies are more expensive because they do not require a person to be entirely out of work when disabled and are considered trustworthy own-occupation disabilities.
Is It Important To Have Disability Insurance?
Fifty-one million Americans do not have Disability Insurance yet. We don’t know what the future holds. Accidents, injuries, and illnesses may come at some point in our lives. Leaving us stressed out being unable to work because of these unforeseen things.
Having Disability Insurance ensures you have financial stability in whatever may arise.
At Heroes Sick Pay, we emphasize the power of choice and provide options for the coverage that best suits you. We are here to help!