What is Disability Insurance?

Disability insurance supplies an income to you and your dependents in case you are unable to work. The amount you will receive is partially dependent on how much you normally earn at your job and partially dependent on what you would need in an accident or illness emergency. Disability insurance is commonly overlooked, but it can protect you in case of an emergency.

Types of Disability Insurance

There are two primary forms of disability insurance: long-term disability and short-term disability. Short-term only covers you in a small gap when you can't work due to illness or injury as you recover. This type of insurance is usually limited to a few months. During that time frame, you will need to provide documents from a medical professional testifying to your inability to work in order to receive your pay. Long-term coverage will supply you with an income for more than the 2 or 3 months you are out for a short-term problem. This can be more complicated, because it may be limited to a shorter period than you really need. If you suspect you will be permanently disabled, you will need to seek additional coverage. 

Who Needs Disability Insurance?

Any person who relies on the well-being of his or her body to earn and income or provide for others needs disability insurance. It is important to consider whether or not you would be able to continue to make home or car payments if you were out of work. The same is true for what you perform on a daily basis for yourself or dependents. If you are unable to perform even simple household tasks like cleaning, cooking or laundry, you may need to rely on someone else to do these for you in a time of need. You may need to pay someone for these services, and you will need insurance in order to do so.

What Does Disability Insurance Cover?

Your disability insurance is paid at a rate that is typically set before you get injured. This means it will not generally be based on the issues you need, but rather it will be based on what you would be earning or doing if you were not ill. The insurance company will only cover those costs you could typically and would typically pay for yourself. Disability insurance is usually a continuance of a portion of a salary. If you are a stay-at-home parent, your contributions to the home may be estimated based on what it would cost to have someone else perform the same tasks.

How Do I Get Disability Insurance?

Your employer usually provides you with a disability election. If you are self-insured or unemployed, you can elect coverage from most standard health or life insurance companies. You will save money by bundling your insurance policies. Your insurance payments may also be tax deductions when you are self-employed. It may seem expensive to elect insurance coverage for a disability, but you will be thankful you have it when you need it.