If you are like most Americans, you probably have health insurance, life insurance and car insurance. If you own your home, you probably also have fire insurance and homeowner's insurance. If you work for an employer, you are also covered by worker's comp insurance if you are injured at work. With all these insurance policies, you probably assume you are covered for nearly any situation, but there a major gap that you may not have considered. If you become temporarily disabled and unable to perform your job, you may be left high and dry without an income unless you have disability insurance.
What is disability insurance?
Disability insurance is designed to pay your wages if you are injured or otherwise disabled and unable to perform your work tasks. It covers both injuries and illness. It typically provides a percentage of your regular wages. It generally pays your wages for a specific length of time, such as until you qualify for social security disability. The amount it pays and the duration of payments depends on your specific policy.
Doesn't workers' comp pay for lost wages if you are injured?
If you are injured at work, workers' comp will pay for lost wages; however, not all injuries occur at work. If you are injured at home or during non-working hours, workers' comp will not cover your lost wages. Workers' comp is designed to protect you while you are working and is not a substitute for disability insurance.
Can't you collect unemployment?
You may think that, if you are injured and out of work, you can apply for unemployment benefits, but you can't. To qualify for unemployment benefits, you must be able and willing to work. If you have been injured and are unable to work, you do not qualify for unemployment benefits.
Can't you apply to social security disability?
If you are disabled, you can apply for social security disability, but there is a catch. In order to qualify for social security disability, you must be expected to be unable to work due to your disability for at least one year. This is called duration of disability and will require a doctor's verification. If your injuries are not expected to prevent you from working for at least a year, you cannot apply for or receive social security disability, even if you are bedridden. So if you break your leg or injure your back and are expected to make a full recovery in less than a year, you are out of luck.
Aren't there programs to help people who can't work due to an injury or disability?
There may be some social service agencies in your area that will provide some assistance, such as with food or travel expenses to and from doctor visits. In addition, you may be able to apply for General Assistance in your town or city and may qualify for SNAP benefits to feed your family. If you have minor children, you may also qualify for other welfare benefits. But these agencies will not pay your lost wages. Relying on available programs and agency funding can be risky business as regulations and requirements change quickly and you may find yourself unable to meet the program requirements. For example, the value of your assets, such as your vehicles and home, may be too high for you to qualify for some services even though you cannot work and do not have the financial resources to pay your bills.
Doesn't your employer need to provide disability insurance?
No. Some employers do provide disability insurance to their employees, but this is not required. In addition, disability insurance offered through employers typically pays a percentage of your customary wages. You will not receive the wages or salary you do when you are working. These benefits may be enough to tide you over in an emergency, but there are not guarantees. If your employer provides disability insurance, check the policy closely to determine if you could survive on the percentage of wages it will cover should you become temporarily disabled.
You may think you don't need to worry about disability insurance because you aren't likely to become disabled and unable to work. The truth is, it can happen to anyone at any time. Purchasing disability insurance will give you the peace of mind of knowing your family will be taken care of if you are injured or become ill. Check the percentage of your wages the insurance will cover and buy a policy that provides enough support to handle your family's financial obligations. Click here to read more.
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