The purpose of disability insurance is to provide financial protection for people that are too ill, injured or disabled to work for a period of time. This isn’t something just for the older generation. It can even cover pregnant women who need time off.
There are two types of disability insurance, Short-Term Disability (STD) and Long-Term Disability (LTD). STD usually covers a portion of your salary from about 3 to 6 months. You could use STD for situations such as a pregnancy or a broken leg. LTD begins after the STD time frame ends. LTD might be used for something more catastrophic.
Some plans may include rehabilitation benefits. This pays either a portion or for all the rehabilitation that are approved. Others require a person to be a part of a rehabilitation program in order to receive benefits.
Also disabilities from a pre-existing condition may be excluded for a period of time after the plan begins. A plan might also limit the benefits of disabilities that are caused by mental disorders or substance use.
Everyone should consider how he or she would manage their financial obligations if they were not able to work for several months. Many people would not only have to worry about taking care of themselves, but also a spouse or a child. One out of three Americans age 30-65 will become disabled for more than 90 day, and one in seven will remain disabled for more than five years. Disability insurance can provide you with some financial protection should you become disabled.
This article is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that FBMC is not rendering professional or medical advice and assumes no liability in connection with its use.