“Your most valued asset isn’t your house, car, or retirement account. It’s the ability to make a living.”

No one fore­sees need­ing dis­abil­i­ty ben­e­fits.  But, should a prob­lem arise, the edu­cat­ed and informed employ­ee can plan for the future by pur­chas­ing dis­abil­i­ty insur­ance to help cov­er expens­es when needed.

When you ask peo­ple what is the num­ber one rea­son dis­abil­i­ty insur­ance is need­ed, most will answer that it is for work­place relat­ed injuries. How­ev­er, the lead­ing caus­es of long-term absences are back injuries, can­cer, and heart dis­ease and most of them are NOT work relat­ed.   In addi­tion, the aver­age dura­tion of absences due to dis­abil­i­ty is 34 months.  So how do you pre­pare for an unplanned absence from work as a result of an injury or ill­ness? Dis­abil­i­ty insur­ance is a great option.

Dis­abil­i­ty insur­ance is cat­e­go­rized into two main types.

  • Short Term Dis­abil­i­ty cov­ers 40–60% of the employee’s base salary and can last for a few weeks to a few months to a year. There is typ­i­cal­ly a short wait­ing peri­od before ben­e­fits begin after the report of dis­abil­i­ty. This plan is gen­er­al­ly spon­sored by the employer.
  • Long Term Dis­abil­i­ty cov­ers 50–70% of the employee’s base salary and the ben­e­fits end when the dis­abil­i­ty ends or after a pre-set length of time depend­ing on the pol­i­cy. The wait peri­od for ben­e­fits is longer—typically 90 days from onset of dis­abil­i­ty. This plan kicks in after the short-term cov­er­age is exhaust­ed. The indi­vid­ual pur­chas­es this plan to pre­vent a loss of cov­er­age after short-term dis­abil­i­ty ben­e­fits are exhausted.

While the ben­e­fits of these dis­abil­i­ty plans are not a total replace­ment of salary, they are designed for the employ­ee to main­tain their cur­rent stan­dard of liv­ing while recov­er­ing from the injury or ill­ness. This also allows the indi­vid­ual to pay reg­u­lar expens­es dur­ing this time.

There are many ways to enroll in a dis­abil­i­ty insur­ance plan. Often times your employ­er will offer long-term and short-term cov­er­age as part of a ben­e­fits pack­age. Sup­ple­men­tal cov­er­age can also be pur­chased.  Talk with your company’s HR depart­ment for more infor­ma­tion on how to enroll in these plans.  Indi­vid­u­als who are inter­est­ed in pur­chas­ing sup­ple­men­tal cov­er­age can also con­tact out­side insur­ance bro­kers or even check with any pro­fes­sion­al orga­ni­za­tions to which they belong (such as the Amer­i­can Med­ical Asso­ci­a­tion for med­ical pro­fes­sion­als) as many times they offer insur­ance cov­er­age to members.

As you begin plan­ning for your future, make sure you research the types of cov­er­age avail­able and dif­fer­ent avenues through which to pur­chase this cov­er­age. For more infor­ma­tion on dis­abil­i­ty and the work­place, check out: