Disability Insurance Articles
How Disability Insurance Interacts With Other Forms Of Coverage
2011-02-22
Disability insurance is insurance coverage that is used a to insure against wages lost due to an injury, illness, or accident. It is different from benefits paid out by the US Social Security Administration, though the two types of coverage can affect each other. Many financial experts counsel social security benefits should only be used as a last resort, as they have tightly defined parameters and have a minimum amount of total time worked during a worker's lifetime. Thus, workers can purchase disability insurance plans if their employers do not offer adequate disability insurance coverage, or if they are self-employed. Any worker planning for the worst case should examine how disability insurance plans interact with other forms of coverage, especially if the disability is expect to be long lasting.
Short term disability insurance plans typically last six months, and can cover anything from pregnancy to car accident injuries. These disability insurance plans pay around 60% of the workers pre-disability wages. These payments for short term disability insurance coverage can be affected by other sources of coverage including social security disability benefits, social security retirement benefits, worker's compensation or other legislated disability benefits like asbestos settlements. Other forms of coverage interact with short term disability insurance plans by altering the percentage and rate in which benefits are paid out.
Should the worker's injury or disability last longer than the term of coverage for short term disability insurance plans, long term disability is the next option to continue receiving salary support. Most reported new claims for long term disability insurance coverage were for musculoskeletal and connective tissue disorders and cancers. Long term disability insurance plans vary depending on the length of support they offer, with some only offering coverage for five to ten years, while others can cover a worker until the age of 65. Long term disability insurance plans interact with other forms of coverage, like health, auto, and home insurance by allowing you to continue to make payments towards these premiums. Long term disability is also affected by other benefits such as social security and workers' compensation.
According to the National Safety Council one worker is involved in a disabling accident every second. Purchasing a comprehensive disability insurance plan can be as important as life insurance, as coverage can prevent a worker needing to declare bankruptcy. While an employers' group health insurance can offer disability insurance coverage, all workers or self-employed people should evaluate purchasing disability insurance. Depending on the type of coverage, benefits be affected by other coverage like social security, worker's compensation, and need to be considered when purchasing either long or short term disability insurance.