Disability Insurance Articles

How Disability Insurance Financially Assists Injured Employees

2010-12-13

If you can't work, you don't get paid: It's a fact of being employed. That fact is also the basis for disability insurance that pays financial assistance to workers who can't work because of sickness or illness.

Many employers offer some kind of compensation when an employee suffers from short-term sickness or illness, such as the flu or recovery from minor surgery. But many employers, particularly those from smaller companies, offer no or little sickness or illness benefits to its employees. However, people-such as professionals and self-employed people-who are not covered by an employer can get disability insurance for individuals from an insurance company.

Disability insurance comes in three main types: workers' compensation, short-term disability coverage, and long-term disability coverage. Each aims to offer financial assistance during the time of disability.

Workers' compensation is legislated. Governments require employers to participate, and employers and employees usually share the costs of the premiums. If an employee becomes disabled on the job, workers' compensation covers part of the employee's salary. It will also most likely cover the costs of medical care and rehabilitation. Benefits vary per jurisdiction.

Short-term disability insurance provides financial assistance to workers who become sick or injured off the job and can't work during their recovery time. The period of absence from work can vary from a few days up to two years. Each company has different policies to determine when short-time disability payments come into effect and under what circumstances. It may also have a separate policy in sickness leave.

Insurers may work with a disabled person on ways to speed recovery or on ways to rehabilitate the person for a return to work, either at the previous job or an equivalent one. Health care providers such as physiotherapists and occupational therapists also become involved. They assess the disabled person's capabilities and administer programs to help the person return to paid employment.

Long-term disability insurance comes into effect after the person covered has been unable to work for two years. Depending on the policy, financial assistance can continue to retirement age or even until death. As with short-term disability coverage and where feasible, the insurance company continues to work with a disabled person on recovery and rehabilitation.

No matter whether you have short- or long-term disability insurance, the policy may or may not include medical insurance to cover or defray the costs of medical expenses.

Disability insurance is designed to replace a portion of income lost when a person can no longer work due to sickness or injury. For most people, disability insurance and supplement medical insurance is essential to have.