Two Reasons To Make Sure You Have Disability Insurance

If you work for a living, there is a good chance that you need the income you bring in to maintain your standard of living. Unfortunately, if you have to go out of work due to a non-work related accident or injury, you could be in jeopardy of losing your income. What will happen to you and your family then? Disability insurance can help to cushion this blow. Although it may not replace all of your income, it may just be what you need to keep a roof over your head and your utilities on. There are several reasons that putting a policy in place is a good idea.

You May Not Qualify For Social Security Disability

To qualify for Social Security Disability or SSDI, there is a stringent list of criteria that you must meet. A few of these are:

  • You must have paid into the system by working jobs that took FICA withdrawals out of your check or made voluntary contributions if you have been self employed.
  • You must have a condition that is on Social Security's list of impairments.
  • You must be totally unable to work.
  • Your condition must be expected to last at least twelve months.

Meeting this criteria is often very difficult to do if you do not have a serious injury or illness that totally incapacitates you. SSDI does not pay for partial disabilities, and only five states have state short-term disability programs. These are:

  • California
  • Hawaii
  • New Jersey
  • New York
  • Rhode Island

If you have private disability insurance, qualifying is very different, although qualifications will vary based on your specific policy. Whether it is an employer sponsored plan or one that you pay for on your own, these plans are normally broken down into two basic types:

Short term disability - Employer sponsored plans normally pay approximately 60% of your salary for approximately 3 - 6 months and are normally used after you have exhausted all of your paid leave time. Self paid plans may pay more or less depending on the type of plan that you purchase and may be paid in addition to benefits that you may be receiving from your employer.

Short term disability plans can be used to cover most illnesses and injuries and can even be used to cover pregnancies. The waiting period before you qualify for benefits is generally only a week, and the approval process normally only requires documentation from you, your employer, and your physician.

Long term disability - This is normally used once you have exhausted your short term disability benefits. This policy may pay 50-60% of your benefits for a specific period of time, until you are able to return to work, or until you qualify for Social Security. If you are unable to return to work making your prior salary due to your physical limitations, it may even help to bridge the income gap between your old and new salaries. Benefits plans vary from insurer to insurer. 

If it is an employer sponsored plan, qualifying is usually almost automatic. All you will have to do is complete a few forms and have your physician complete the medical certification.

Social Security Disability Can Take A Long Time

Even if you meet all of the criteria, the process for qualifying for SSDI can possibly be a very long and drawn out process. Approval can take anywhere from 30 days up to two years, depending on what level of appeal your application is approved on.

This approval is normally geared more towards the longer end of the time frame versus the shorter due to approximately 70% of all applications for SSDI being initially denied. This number may be even higher depending on where you live. 

During this time, if you do not have disability insurance in place and you have exhausted your paid benefits, you may be without any financial benefits coming in. This could possibly be financially devastating unless you have other financial means to support yourself with. Don't place yours or your family's financial health at risk. Make sure that you have disability insurance just in case you need it. For more information, contact a local insurance company like Iler and Iler