Disability insurance is an essential type of coverage that protects your income if you are injured or sick and unable to work. Choosing the right policy can be difficult if you aren't aware of a few details about disability insurance. Here are three facts about disability insurance that you may not know.
Short-Term and Long-Term Coverage Gap
Insurers typically offer two types of disability insurance: long-term and short-term. Short-term disability is intended for situations where you will only be out of work for a few months, while long-term coverage is meant to cover income for a period of many years.
The benefit period of short-term coverage sometimes transitions seamlessly into long-term coverage, but in some cases there may be a gap between these two types of coverage. You should analyze your insurance policy carefully and make plans for a gap in income if necessary.
Full Income May Not be Covered
Many disability insurers will not provide coverage that pays for the full amount of your lost income. This is a financial incentive for the insured party to return to the workforce. If your disability is permanent and will prevent you from returning to even light-duty work, you should look for an insurance policy that covers enough of your income to maintain your current way of life.
You should also remember that contributions to your retirement plan will cease when you stop working, so returning to work if at all possible is the best way to secure your financial future.
Accident Coverage Vs. Accident and Sickness Coverage
In addition to providing supplemental income for the time you are out of work, some disability insurance plans will provide a lump sum to assist with immediate costs. Policies differ widely in this regard, as some insurers will only provide payments for medical bills resulting from an accident on the job.
Disability insurance policies that offer accident and sickness coverage will also pay medical costs for illnesses that have put you out of work. Because you can never predict the incident that will prevent you from working, you should look for a plan that covers both injuries and sickness if you want the best coverage that is available.
Knowing the basics of disability insurance is the first step toward protecting your income if you are out of work. Keep these tips in mind when buying disability insurance so that you can find the best policy to suit your needs. Contact a law firm that specializes in disability claims, such as Iler and Iler, for more information specific to your situation.