One of the most important coverages for working men and women is disability coverage.
Many employers cover their employees for both short- and long-term disability, but most do not. Self-employed people will opt out of their workman’s compensation many times to save money. So here is why you should have it, how you can get it, and how much coverage you need.
Most employers do have workman’s compensation coverage on their employee’s and by law they are supposed to have it. Many do not. Even with workman’s compensation coverage, there are limitations to what it will do for you. The plan covers you if you are injured on the job. It does not cover you for injuries at your house or while you are driving your car. It also does not cover you for sickness. This is where individual disability insurance coverage comes in.
You are walking out the door on one of our icy mornings, and you slip and fall and injure yourself. Turns out you tore a rotator cuff and will require surgery and rehab lasting a couple of months, and you won’t be able to work for maybe as long as 3 months. Workman’s compensation won’t do anything for you, and after your vacation time and sick days are used up, you are on your own.
Many employers have an option of allowing employees to buy short- and long-term disability through payroll deduction. If your employer does not offer voluntary coverage, ask them to do it. It costs the employer nothing and saves them some taxes so they actually make money. These voluntary disability policies are great. Most are almost guaranteed issue, and you can take the coverage with you at the payroll rate if you change employers.
Self-employed people and others can buy individual disability insurance policies. It really makes sense for those self employed because it is another type of health insurance which is tax deductible in their business. It also makes sense for people who do not have access to disability insurance at work.
Short-term disability coverage is coverage up to usually 2 years, but you can take a shorter coverage period. Most disabilities are like my example, several months.
You can start your coverage from day one for an accident or day 7 for a sickness. You can tailor that start time and length to fit your budget. Typically, disability insurance covers about 60 percent of your income if you take the maximum coverage. You may not need that. When getting disability insurance coverage, think of bills that won’t go away. Your car payment, rent, utilities, etc.
For those self employed, you may still be able to run your company but not be able to do the work so you need get enough disability insurance coverage to pay for an employee doing your physical work.
If your disability is deemed permanent, you are eligible for Social Security disability insurance, but keep in mind it may take up to two years to get it.
Long-term disability insurance is for more than two years and can be for as long as you believe you might need it. In some professions, the loss of a leg or a hand or other life-changing injuries or sickness may prevent you from ever going back to the job you did before. Again you can choose when you want that coverage to start, for how long and for how much.
The most important coverage is short-term disability insurance. The majority of disabilities are short term. So that should be the starting point. Don’t try to cover every conceivable possibility. Get what you can afford, but get something.
by Jim Blair | Mar 13, 2018
Author: Jim Blair
Source: Herald-Standard
Retrieved from: www.heraldstandard.com
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