Sometimes your employer offers disability insurance, and sometimes they don't. But, get this, sometimes they offer it, but it's not nearly enough to properly protect you. So how are you supposed to know if you need it, or if you need more? No problem, you’ve come to the right place.
A local independent insurance agent can help you more than you can imagine. They're an incredible resource to have in your corner when it comes to individual disability insurance planning.
They'll be able to go through all your needs and risks to help evaluate your coverage and get you set up in the right direction. Sounds pretty nice, doesn't it? But first, it's time to talk a bit more about disability insurance.
What Is Disability Insurance?
You probably aren’t spending your downtime thinking about what you'd do if you become disabled or ill and couldn't work, but a little planning now can avoid a lot of hassle later.
Simply put, disability insurance provides replacement income, usually between 40% and 70% of your pay, if you become disabled, injured, or critically ill and can't work. With so many disability insurance and program options out there, though, you really should have a trusted independent insurance agent in your corner.
Individual Disability Insurance
Individual disability insurance is for the individual and self-employed and provides coverage for you when you become critically ill or disabled and are not able to work.
- Individual long-term disability insurance: Offers years, or even decades, of protection.
- Individual short-term disability insurance: Like long-term disability, only it's short-term, with protection that only lasts days and months, instead of years. It also provides coverage for things like maternity leave and complications from pregnancy or childbirth.
Group Disability Insurance Plans
Like individual, group disability insurance also provides coverage for you when you become critically ill or disabled and are unable to work, only it's offered through your employer.
- Group short-term disability insurance: This is offered through your employer. Coverage is offered to all eligible employees. And you have the choice to opt out. This policy will cover short-term disabilities, injuries, and illnesses. One of them is pregnancy, aka maternity leave, and childbirth. The group short-term benefit period is normally between one month and a year.
- Group long-term disability insurance: This plan is in it for the long game, with policy benefits lasting years or decades. It is also offered to the eligible group of employees by your employer and you can opt in or out.
Differences between Individual and Group Disability Insurance Policies
Part of making the right decision is knowing the differences between policy types, like:
- Individual short-term and individual long-term disability insurance: This coverage is offered to the individual and is a single policy. The individual is rated for health risk factors and age and then offered a plan to suit their needs.
- Group short-term and group long-term disability insurance: These are offered through your employer. They are offered to the entire group of eligible employees. Bonus, individual health risk factors are not taken into account because the rate is based on the group. Your employer may pay for all or part of the premiums, depending on how lucky you are and how giving they are.
Government Disability Insurance Programs and Benefits
Remember there are a lot of choices when it comes to disability insurance, not just group and individual. There's also:
- Social Security Disability Insurance: Sound familiar? You're probably used to seeing this come out of your paycheck. But just in case, it's a federally funded payroll disability plan run by the government.
- State disability programs: Out of the 50 states that make up this wonderful country, only 5 of them offer state disability programs. They are California, Hawaii, New Jersey, New York, and Rhode Island.
Now, if it all seems a bit overwhelming, don't worry, an independent insurance agent can help you go through your options and get the right plan in place.
How an Independent Insurance Agent Can Help
An independent insurance agent can be your knight in shining armor when it comes to individual disability insurance. When you feel like it's hopeless to find the right kind of coverage at the right price, they gallop in with coverage options that all fit right into your budget.
Your independent insurance agent will bring a number of different individual disability quotes to the table based on all your wants and needs and help guide you to the right options based on their experience and expertise.
Go on, give your local independent insurance agent a call and get going on your individual disability insurance before it’s too late.