Disability Insurance

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Disability is far more common than you think—everyday someone gets sick or have an accident that prevents them from working and earning a living.  What if this were you? How would you meet your expenses without an income? Look at these statistics:

 

·    Over 1 in 4 of today’s 20 year olds will become disabled before they retire.¹

·    The average long-term disability absence from work is 32.1 months.¹

·    Medical problems accounted for 62% of all bankruptcies in the USA in 2015.¹ 72% of people who filed bankruptcy had health insurance.¹

·    Disabilities aren’t always caused by accidents, most disabilities are caused by illnesses.² 90% of all long-term disabilities are caused by illness.²

·    Most disabilities occur off-the-job.  Over 95% of all disabilities are not work related so they are not covered by Workers’ Compensation.²

·   In 2015, the National Institute on Disability, Independent Living and Rehabilitation Research (NIDILRR) reported that of the US population with disabilities, over half (51.1%) were people in the work ages of 18 to 64.  

·   There is a mandatory waiting period that is applied to Social Security Disability Insurance (SSDI) claims. In addition to the 3 to 4 months it takes to get a decision on your initial claim, you must be disabled for 5 months after your disability onset date before you can start receiving SSDI cash payments.  For some people, however, it took as many as 24 months to get benefits if appeals had to be filed.

 

With these statistics, the need for Disability Insurance is obvious!

 

There are 4 popular ways Disability Insurance is usually bought:

 

·    As a rider on an Accident Insurance policy

·    As a rider on a Life Insurance policy

·    As a Short-Term Disability policy

·    As a Long-Term Disability policy

 

Accident Insurance Policy with Disability Rider: Accident Insurance policies are designed to pay out-of-pocket expenses created from accidents  covered insured persons experience at inopportune times.  Statistics show that in 2015 there were over 2.9 Million non-fatal accidents and injuries in private industries, over 900,000 required days away from work, and the average number of days away from work was 8.³  With many people in today’s work market living from check-to-check, 8 days off work with no guarantee of receiving pay can have a disastrous effect on a household.  But many accidents result in much longer time away from work and significant loss of wages.

 

The disability rider on an Accident Insurance policy can cover disabilities resulting from accidents and sicknesses—each requiring additional premiums to the basic Accident Insurance policy premium.  Disability riders can provide from $100 up to $2,000 monthly benefit depending on policy limits. The sickness disability rider usually pays less than the accident disability rider, but not by much. The elimination (waiting) period can be as few as 0 days for accidents and 7 days for sickness, and can be as many as 30 days.  Benefit period varies from 3 months to 12 months depending on policy limits.

 

Accident Insurance policy Disability Riders usually pay the same benefits regardless of age or gender, may have the lowest premium of all Disability policy options, maybe easiest to qualify for and can be guaranteed renewable up to age 70.  Issue ages are normally from 18 to 64.

 

Life Insurance Policy with Disability Income Rider:  One purpose of Life Insurance is to replace the income of a family’s bread winner in the event he/she passes away.  So you can imagine that if that bread winner experiences an accident or a sickness and is unable work resulting in an interruption in the flow of income, the effects on the family’s lifestyle can be very disastrous.  There may not be enough money to pay the monthly bills including insurance premiums. 

 

The Disability Income Rider on the Life Insurance policy can pay you (the qualified disabled insured) a monthly benefit if you became totally disabled and unable to work.  Some Disability Income Riders only pay for accident disabilities, while others pay for both Accident and Illness disabilities.  Some Disability Income Riders pay only if you (the insured) is unable to work at your regular occupation while others will pay if you (the insured) cannot work at any type of jobs.  Disability Income Riders doesn’t necessarily pay benefits based upon the percentage of your lost income or earnings, but instead, it may state that it will pay a percentage of your lost income for a specific period of time— usually 3 to 6 months.

 

Short-Term Disability Insurance:    A plan of insurance to provide you (the qualified insured) with an income in the event you became disabled and could no longer work to earn an income.  Short Term Disability (STD) insurance can provide coverage for 3 to 24 months, depending on the length of coverage you choose and the insurance company issuing the coverage.  Short Term Disability usually covers pregnancy like any other illness.  Short Term Disability pays benefits of up to 66⅔ percent of your monthly income, but usually not exceeding  $5,000.

 

Most Short Term Disability insurance covers you for 12 months or less, but some companies will offer coverage for up to 24 months.  In the first 12 months, disability is usually defined as;

 

(a)  unable to perform substantially all of the duties pertaining to your regular occupation,

(b) not working at your place of employment for pay or benefits, and

(c) under the care of a physician. 

 

When Short Term Disability exceeds 12 months, the second year’s disability is often defined to be;

 

(a)  unable to work at any job you are qualify for by reason of education, training or experience, whether or not you receive pay or benefits for working, and

(b) under the care of a physician.

 

Short Term Disability insurance plans can have a waiting period (elimination period) that must be satisfied before you  receive the benefits of the plan.  This can range from 7 days to 30 days.  The elimination period can be compared to the deductible in your major medical insurance plan or in your car insurance plan.

¹ 2015 Harvard University study.

¹ Council for Disability Awareness, Disability Statistics , 2011

² Council for Disability Awareness, Advisor Disability Awareness Study, 2011

³ Bureau of Labor Statistics (www.bls.gov).

Long-Term Disability Insurance:    A plan of insurance to provide you (the qualified insured) with an income over a long period of time in the event you became disabled and could no longer work to earn an income.  Long Term Disability (LTD) insurance usually provides coverage for 2 years,  5 years, 10 years, or to age 65, depending on the length of coverage you choose and the insurance company issuing the coverage.  In some cases, Long Term Disability will even provide coverage to age 70.  Long Term Disability pays benefits of up to 66⅔ percent of your monthly income, but usually not exceeding   $6,000.  Long Term Disability also covers pregnancy and complication from pregnancy like any other illness.

 

Note: Specialty Long Term Disability such as disability insurance for Buy-Sell Agreements, other Business Disability insurance, and LTD insurance for highly paid individuals will pay a much higher monthly benefit.  For these types of disability insurances, please call (954)239-5259 and arrange to  meet with  a Business Insurance Consultant.

 

Like Short Term Disability, in the first 12 months, disability is usually defined as;

 

(a) unable to perform substantially all of the duties pertaining to your regular occupation,

(b) not working at your place of employment for pay or benefits, and

(c) under the care of a physician. 

 

When the disability exceeds 12 months, the second and subsequent years’ disability is often defined to be;

 

(a) unable to work at any job you are qualify for by reason of education, training or experience, whether or not you receive pay or benefits for working, and

(b) under the care of a physician. 

 

However, unlike Short Term Disability, Long Term Disability will pay Partial Disability benefits to you if you are able to work, but your earnings are substantially lower than prior to the your disability.

 

Long Term Disability insurance plans  have a waiting period (elimination period) that must be satisfied before the insured receives the benefits of the plan.  This can range from 30 days to 12 months.   The elimination period can be compared to the deductible in your major medical insurance plan or in your car insurance plan.

 

Some Long Term Disability plans integrates their benefits with any benefit you or your spouse and/or your children living at home are eligible for or receives from other income sources.  This means that the insurance company will ensure that the total amount of benefits that you receive  from all sources does not exceed 66⅔ percent of your monthly income.

COMPANY

NAME

PHONE NUMBER

WEBSITE

TYPE OF PLANs

Manhattan Life Group

1-800-669-9030

Get A Quote

Accident—On/Off Job    Disability Rider

Short-Term Disability

Illinois Mutual Insurance Company

1-800-437-7355

Get A Quote

Accident—Off Job    Disability Rider

Short-Term Disability

Ameritas Life Insurance Corp

1-800-319-6903

Get A Quote

Individual—Short-Term & Long-Term Disability

Business Overhead Expense Disability

Assurity Life Insurance Company

1-800-869-0355

Get A Quote

Individual—Short-Term & Long-Term Disability

Business Overhead Disability for Truckers

Guardian Life Insurance Company

1-800-441-6455

Get A Quote

Individual—Short-Term & Long-Term Disability

Business Overhead Expense Disability

Buy Out Disability

Student Loan Protection

Mutual of Omaha

1-800-995-6236

Get A Quote

Accident Only—On/Off Job Disability  

Individual—Short-Term & Long-Term Disability

Business Overhead Expense Disability

Sun Life Financial (formerly Assurant)

1-877-736-4739

Get A Quote

Individual—Short-Term & Long-Term Disability

Aetna

1-800-872-3862

Get A Quote

Individual—Short-Term & Long-Term Disability

UnitedHealthcare Life Insurance Company

1-800-273-8115

Get A Quote

Individual—Short-Term & Long-Term Disability