Disability Insurance Articles

Disability Insurance Versus Workers Comp

2010-07-14

Every second, another American is disabled due to an accident. These people are unable to work because they have been injured or have a disabling illness. They are then eligible to obtain workers compensation or disability insurance. Whether you receive one, or both, depends on a number of factors. Workers compensation covers you when you're injured on the job. Workers comp includes benefits toward medical bills. It also covers lost wages due to your injury or illness. It usually covers two-thirds of your lost wages. In every state, workers comp is available by nearly all employers. Nevertheless, there are exemptions to this.

Disability insurance is a plan that insures the money you would earn when a disability prevents you from working. It includes long and short-term benefits as well as sick leave. There are many types of disability insurance. Individual disability insurance is purchased in the open market. Self-employed individuals buy this type of insurance. So can people whose employers do not cover them. High Limit disability insurance allows you to receive up to 65% of your income if you become disabled. Key Person disability insurance provides important benefits to companies in the event that a key employee is disabled. Business Overhead Expense disability insurance provides repayments to businesses for overhead expenses in case their owners become disabled.

The general rule of thumb is that you cannot receive both disability insurance and workers comp; there are exceptions. For example, if workers comp payments are delayed or denied, you may be entitled to disability insurance. Also, your workers comp may pay you a lower amount than your disability insurance would. You may then be entitled to the difference.

Whether you want to receive disability insurance or workers comp, there are several factors involved. It's important to know if the disability was unpredictable, that it didn't come from a previous illness. It's important to know if the job caused the illness, especially in the case of workers comp. It's important to know what other insurance policies will pay for the disability. It's also important to know whether the disability itself is a total disability or only a partial disability. These are only some of the things that need to be considered. Not all these variables matter to both disability insurance and workers comp.

Workers comp is available to you if you are injured on the job. It is usually settled with the employers in place of any money they would pay through a lawsuit. On the other hand, we have disability insurance. Disability insurance, unlike workers comp, is given for a set period. You receive it for injuries or illnesses that prevent you from working, not injuries that occur at work.