If you are no longer able to work, it is important to understand the various types of disability insurance available to you, including private and government payment options. Individual disability insurance can be purchased privately by you or given as part of an employer benefits package. Payments may also be available through workers’ compensation or through the Social Security Administration if you have a long-term disability and meet certain qualifications. When you have disability insurance, the coverage can either be short- or long-term. Our disability lawyer may help you answer the question of, “Do I need disability insurance?”
Understanding Disability Insurance
Short-term disability insurance provides you with a replacement for some of your wages if you are temporarily unable to work. This is a useful type of insurance, since there are no government benefits for short-term disabilities. Long-term disability insurance is a more permanent income solution if you are unable to work for a long period of time. This type of insurance may replace government payments.
Types of Long-Term Disability Insurance Plans
There are three kinds of individual long-term disability policies. Non-cancelable policies have a fixed premium and the insurer is not able to lessen your benefits or raise your rates as long as you pay on time. Guaranteed renewable policies ensure that the company is not able to change your policy benefits as long as you pay on time, but it may increase the premiums of your entire policyholder class. Conditionally renewable policies involve fluctuating premiums and the possibility of canceled coverage if any policy red flags are raised.
Workers’ comp and SSA are not purchased by employees. Workers’ compensation is usually provided as a benefit if you are injured while at work. It pays for lost wages for certain periods of time missed from work and is either temporary or permanent in nature. SSDI or Social Security benefits occur over a long-term basis if you cannot work in the future. There are various types of income and hourly work requirements that apply to these types of benefits as well. It is also worth noting that even if you qualify for both Social Security disability benefits and have a disability insurance policy through your employer, your privately purchased benefits may affect the government benefits you are entitled to. It may be helpful to consult a lawyer for advise on how your payments could interact with each other as well as eligibility requirements.