Did you know that at any point in time, there are approximately 9 million disabled workers in the U.S.? According to current projections, 1 out of every 4 workers who are currently in their 20s will become disabled before they reach retirement age. The reasons for disabilities are often unpredictable: common causes include arthritis, back pain, cancer, diabetes, and heart attacks. None of us plans for a catastrophic accident or illness, yet none of us is exempt. For the times when a situation is severe enough to keep you from working, Disability Insurance can keep you from financial ruin.
Disability Insurance Defined
Disability Insurance replaces a portion of your income, in the case that you are unable to work as a result of an illness or accident. Typical coverage provides anywhere between 45% and 65% of your gross income. As you recover, these benefits are intended to help you cover your expenses. In addition to replacing a portion of your income, Disability Insurance can help cover additional costs connected to your disability, such as home modifications and medical bills. Loss of income from your job combined with such extra costs added to your regular bills could mean emptying your savings and retirement accounts. To prevent that scenario, Disability Insurance is available.
Disability Insurance Coverage
According to the National Association of Insurance Commissioners, or NAIC, you should know that different insurers or Disability Insurance policies often vary in how they define a disability. Some cover illnesses, while others do not. They can also vary in how they cover partial disabilities versus conditions that leave you unable to work at all.
Typically, insurers offer two types of Disability Insurance: short-term coverage and long-term coverage. Short-term Disability Insurance coverage typically lasts for 3-6 months following an injury or the onset of an illness. Long-term Disability Insurance coverage would kick in once short-term Disability Insurance ends. Depending on the kind of coverage you have, long-term coverage could last 2-3 years or until you reach the standard retirement age.
Sources of Disability Insurance
Many people assume that their employer provides Disability Insurance coverage. It’s important to note that Disability Insurance coverage is distinct from Workers’ Compensation coverage, which usually covers only work-related incidents. While some states require employers to provide short-term Disability Insurance coverage, no laws currently require long-term coverage to be provided. Be sure to find out exactly what kind of policy your employer provides and what the coverage includes. You may be able to pay for increased coverage through your employer’s policy; otherwise, you may wish to purchase your own individual Disability Insurance policy.
Those who have a condition that keeps them out of work for at least a full year may qualify for long-term coverage through the Social Security Disability Insurance program. In order to be eligible for that benefit, you would have to have worked long enough to qualify for Social Security. Qualifying for the program can be difficult though, and payments typically don’t provide enough to live on.
The Nicholas Insurance Agency, led by Greg Nicholas, is a family owned business serving the York county, Pennsylvania region. In the insurance business since 1981, Greg Nicholas helps families, businesses and individuals understand the value of different insurance products and make wise decisions when selecting the best insurance products for their specific situations.
Offering exclusively Allstate insurance products, the Nicholas Agency provides auto, homeowners, rental and landlord insurance as well as life & disability, recreational vehicle, motorcycle and personal liability insurance.
For more information, visit our two York, PA locations at Westgate Plaza or York Marketplace or call us at (717) 764-2024.