Disability Insurance Articles

How Long Disability Insurance Benefits Will Last

2011-09-19

Disability insurance benefits can save a policyholder from financial ruin in the months after a serious illness or accident prevents the policyholder from working. However, there are benefit limits on every disability insurance policy, and benefits will not continue indefinitely. Before buying disability insurance, it's important to know how and why benefits will end and how to select an appropriate and fair policy.

In general, disability insurance benefits will continue until a patient is able to return to work or until the policyholder reaches a certain age (usually 65). Age requirements help the insurance companies to ensure that they're not paying out past the age of retirement. The patient's ability to return to work is gauged by a doctor. Most disability insurance providers will require regular notes from a physician to prove that a policyholder is unfit for work, but as long as these notes are received on a regular basis, benefits should continue. Some disability insurance policies do have set annual or lifetime benefit limits; after payouts have reached these limits, the disability insurance policy will end and no further benefits will be paid. However, open-ended policies without these types of set limits are becoming more common.

There are some medical situations in which a patient's status as "disabled" could be revoked before the patient can actually return to work. For instance, if a patient refuses to follow a doctor's orders, the patient's disability insurance benefits might end, especially if the patient isn't taking medication or participating in required physical rehabilitation. Some disability insurance policies only pay benefits until the policyholder is fit for any occupation. This is why it's important to carefully read the terms of a policy--if the policy will only be valid until a disability is partially healed; it's a much less valuable tool than a disability insurance policy with better coverage.

Policyholders should check with their insurers to understand how their benefits work. It's a good idea to ask an insurance agent about situations in which benefits will end and how "disabled" is defined under the terms of agreement. It's best to look into these terms before buying a policy or at least before a disability stops the policyholder from working, as an unsatisfactory policy can then be canceled or switched to another insurance provider without penalty. In addition to the terms of benefit payouts, buyers should understand elimination periods and other parts of their policies that can affect overall value. Disability insurance is certainly a major purchase, and by taking the time to understand how it works, buyers can get tremendous peace of mind and financial protection.