Best Disability Insurance Companies of 2021 – Forbes Advisor


There are two main types of disability insurance: short term and long term. The period during which you are paid after becoming disabled is called the “benefit period”.

“Short-term disability insurance typically covers you for three to six months,” says Carol Harnett, chair of the Council for Disability Awareness, a non-profit organization dedicated to educating adults about the importance of insurance. disability. She adds that employers often offer this coverage through a group plan, making it an inexpensive, if not free, option for their employees.

Meanwhile, long term disability insurance can pay you off for years after you’ve become unable to work. You choose your compensation period when you take out a contract, the duration of which is usually reflected in the price of the monthly premium. Depending on the provider you choose, some policies continue to pay until you reach retirement age.

Many disability insurance policies also provide for a “washout period” or a waiting period before you actually start receiving payments from the insurance company. A policy with a short elimination period means you will get the money quickly, but you will likely pay a higher monthly premium.

“The elimination period for a short-term disability is usually seven to 30 days,” says Harnett. “Long-term disability insurance usually has a waiting period of three to six months before becoming eligible for benefits. If you recover and are well enough to work again before the end of the waiting period, you will not receive any allowance, ”she explains.

Disability insurance through your employer

“Voluntary benefit offerings” are the fastest growing approach to providing short-term and long-term disability insurance in the workplace, says Harnett. “Employees can purchase short-term and / or long-term disability insurance through voluntary offers,” she explains. “The employee pays the entire premium when they sign up for voluntary benefits. “

Voluntary coverage has two advantages:

  • If an employee files a claim for disability benefits, they are not taxable since the employee has paid the premium.
  • If the employee leaves the company, they can take the coverage with them (if the coverage is transferable).

When you can’t return to work

“Depending on the design of the plan, after two years of long term disability insurance benefits, you can be assessed to see if you can work in any occupation for which you are reasonably qualified,” says Harnett. “For example, a surgeon who develops a hand tremor and can no longer perform surgery may be able to work as a medical director or consultant.

“An insurance company will offer to help people find new jobs that are at a similar economic level through vocational rehabilitation benefits available as part of long-term disability coverage,” he adds. -she.

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