Working a cozy desk job with no pre-existing conditions, we too often believe the worst will never happen to us. This is largely because when we hear the words disability insurance, we imagine a spinal cord injury rendering us disabled. Indeed, this is rare, but did you know that you are more likely to become disabled before age 60, as opposed to pass away?
Cancer, heart disease and stroke are the most common illnesses and can put you out of work for an indefinite amount of time. If you don’t have a group insurance plan or private insurance, it will be difficult to manage expenses.
In fact, only 55 per cent of Americans can support themselves with their readily available savings, according to a 2015 study by Pew Charitable Trusts.
This is especially concerning since even a fall can lead to an injury that takes you away from work for weeks or months. Yet, only 69 per cent of Americans have disability insurance.
Across North America, individuals and their families are not preparing enough for the unexpected, that’s why your place of employment does provide the support you need, or are self-employed, contact a reputable insurance brokerage to find the best policies available and receive a free disability insurance quote.
Types of Disability Insurance
There are two types of disability insurance: short term and long term. Both are meant to replace a percentage of your base salary, dependent on what disability policy you purchase. The types of policies lie in its definition of what’s “disabled.” Other factors include where you can’t work at all or if you are unable to work a job in your field.
- Short-Term Disability Insurance: Replaces a portion of your salary, usually 60 to 70 per cent, with a monthly cap under an employer-sponsored plan for a set amount of time. The payout is for less than six months, however could run as long as a year if the illness or injury persists. The waiting period to receive benefits is usually two weeks after you become disabled.
- Long-Term Disability Insurance: This replaces a portion of your salary (40-60 per cent) with a monthly cap (ex: $10,000). Benefits will cease once the disability has healed and/or you are back at work. If the disability remains, then dependent on the policy, the benefits will run for a specified number of years or even until retirement age. Long-term disability insurance has a waiting period with the length varying by policy (usually 90 days), which is timed so benefits come into effect when the short-term disability insurance period expires.
Don’t let an injury hold you and your family back. Plan for the future with a comprehensive disability insurance policy that will give you the peace of mind that in the case of an injury or illness of no fault of your own, will not diminish your financial security.