Disability insurance is the type of coverage that allows payouts to an individual who is unable to continue working at his or her usual place of employment due to an injury or illness. This kind of coverage is designed to provide compensation for some of the lost income an injured or ill worker would have normally received from his or her employer had he or he not been struck with some disabling condition.
Anyone who needs a regular paycheck to provide for his or her family is the ideal candidate for this kind of insurance. Many employees believe that the normal worker’s compensation policy will fully cover a person in the case of an injury or illness. It is very important to remember that worker’s compensation benefits only come into effect if a person is injured at the workplace. The unfortunate truth of the matter is that often an employee can fall ill or be injured outside of the workplace, causing disability and the resulting loss of income. This is where disability insurance can be so helpful.
When a covered person is injured or falls ill and is thus unable to work, he or she then should file a claim with the insurance company that is providing this specific kind of coverage, much the same as one would do with any other insurance claim. And, as usual, the insurance provider then goes over the claim determining the covered person’s appropriate payout. Should it be approved, the claimant is then paid.
These policies come in several different varieties, with differing degrees of coverage. The most common is designed to help in the case of a disability and provides monetary compensation to cover a portion of lost income the worker would have earned if healthy and working as normal. Other types of coverage include more extensive wage loss compensation and help with other expenses that can be necessary during a time of disability.
This kind of coverage typically covers up to 60% of your income lost and it can help you to avoid financial ruin. As part of a package of benefits, employers often give an employee a choice of both short and long-term disability policy coverage.
Short-term disability (STD) helps you with pay in the event that an illness or injury keeps you off the workplace floor for a limited time. Depending on the policy particulars, coverage can start anytime from one to fourteen days after you have a condition that prevents you from working. Short-term disability generously provides compensation for most or all of your income while you are unable to work.
Long-term disability (LTD) is what provides a portion of your income when you are unable to work for an extended amount of time. If your illness or injury is work related, Worker’s Compensation can help with coverage, but LTD is there for non-work related conditions.
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