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 What do you need to know about disability insurance?
Once you become disabled
and apply for benefits, you have to wait for a certain amount of time
after the onset of your disability before you receive benefits. If you
are applying for benefits under a private insurance policy, this amount
of time (called the elimination period) ranges from 30 to 720 days, although
the most common period is 90 days. If you are applying for benefits under
a type of social insurance, your waiting period may be as long as five
months (for Social Security).
You can purchase private disability
insurance policies that guarantee lifetime coverage, but they are very
expensive. Most people buy either short-term policies (benefits are paid
for up to two years) or more commonly long-term policies (benefits are
paid for a few years or up until age 65). In fact, many injuries
or illnesses do not disable you permanently. After a rehabilitation
period, you may be able to return to work full- or part-time. Most private
and social insurance programs encourage you to go back to work either
by paying you partial or full benefits while you try to work or by continually
reevaluating your disability. In addition, they usually pay for any training
or rehabilitation you might need to help you get back to work.
Both private and government disability
insurance are complex because the needs of each individual are complex.
or in addition, injury or illness is unpredictable. As a result of complexity,
private and government disability insurance programs are designed with
many restrictions and--in the case of individual disability insurance,
at least--many options. When you purchase a disability policy, you may
have to spend a lot of time evaluating your future needs and weighing
what coverage you can afford to buy against what coverage you'd like to
have. Then, you'll have to compare individual policies and determine what
coverage you are already entitled to through your employer or through
the government. Make sure to ask us (as an unbiased source) or a qualified
broker many questions.
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