WHAT IS DISABILITY INSURANCE

Disability insurance (DI) is a form of income protection, typically provided through your employer, that ensures you will still receive a portion of your monthly income if you are unable to work due to an illness or injury. 


HOW DOES DISABILITY INSURANCE WORK?

There are two types of disability insurance offered:

Short-term disability insurance (STDI) replaces a portion of your monthly income for a period of anywhere from four to six months. Individual policies may vary in coverage. 

Long-term disability insurance (LTD) provides for longer-term coverage. If you are unable to work for longer than a span of about six months, you would choose LTD. Depending on your type of policy, payouts can come in two, five, or ten years, or until you become social security eligible. An average disability claim lasts about three years. 

STDI and LTD policies work best when they are used in tandem with each other. LDT policies typically take longer before kicking in, which means you will need to use an STDI until your LTD policy begins.  

If your employer does not offer LTD, there still may be policy options available to you. 

-   Own-occupation disability insurance: An individual who becomes injured or disabled on the job and can no longer perform a majority of the occupational duties they were trained to perform is covered under own-occupation disability insurance. If you can afford to, it’s recommended that you purchase an own-occupation policy, making sure to purchase one that comes with a guaranteed renewable policy (as long as the premiums are paid on time).  

Two Examples: 

  1. A surgeon who is injured while working and can no longer perform surgery but can get a different job at the hospital or take a teaching job at University would still be eligible to receive own-occupation disability insurance. 

  2. A tattoo artist who is injured on the job and can no longer perform his duties as a tattoo artist but can take on a different role at their studio, such as a managerial position, would be able to receive own-occupation disability insurance while still working.  

-     Any-occupation disability insurance: Covers anyone who becomes disabled and is no longer able to work in any capacity. 


Interested in learning more about your disability insurance options?

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