Disability Insurance Articles

Obtaining Disability Insurance Apart From A Company Plan

2010-08-01

American workers typically get their health insurance through their employer. Often companies include enrollment in a company disability plan as part of the benefits package it offers employees. Just how good this disability insurance is depends on quite a number of variables, all of which can affect an employee if he or she is unable to work.

Increasingly, insurance companies that are a firm's carriers are more interested in denying claims than granting them. In the case of disability insurance, this is especially so. The carriers put up arbitrary roadblocks. For instance, they deny claims based on not receiving medical records in an arbitrarily short period of time. They will hire their own doctors to dispute the employee's doctor's claim of injury, and will construe any ambiguity in medical records to mean the employee intended to commit fraud, thereby making his policy invalid.

Besides the insurance carrier, the company's management can also be unhelpful in an attempt to save money. Many policies have provisions that any claim can be approved or denied and may or may not include an appeals process. A company disability plan may or may not be convertible. That is, if the employee leaves the company, he or she would have the right to keep coverage by taking over premium payments.

The benefits provided are usually limited to a portion of the employee's salary (typically 60%), without provision for in-home care, living facility care, or physical therapy. In addition, they will deduct Worker's Compensation of SSDI payments from the benefit.

The employee who wishes to ensure that he will be covered to the extent necessary in case of short- or long-term inability to work has recourse: the private disability insurance industry. Benefits can be tailored to need (for instance, adding another 20% of the employee's salary to the benefit layout to bring income close to what it was before the disability). Policies can be made non-cancelable, provision for assisted living, in-home care, and therapy can be included, and it's even possible to keep getting benefits if the policyholder can't continue to pay the policy premiums. All of this comes with a price tag, naturally, but an employee who does not wish to be made to rely on the company disability plan can consult a broker or agent to tailor the policy to provide the maximum benefit his or her budget permits.

As with company group policies, there are restrictions and pitfalls that come with private disability insurance, but paying the extra expense for such a policy can bring greatly increased security.