Often, we rely on our sick leaves to buffer the days when we need to miss work due to illness. However, sick leaves will be insufficient when we become sick enough that we cannot report to work for weeks, even months at a time. So while we are ill and in need of medical attention and care, our income is cut, and we would then need to start eating into our savings. The average American does not have the kinds of savings needed to buffer long bouts of illness. That is why disability insurance is so important.
Disability coverage is a type of insurance that insures your income against the risk of a sudden illness or injury that renders you unable to work. Covering as much as 65% of your income, it can assist you in defraying your costs, thus avoiding a financial meltdown. Disability insurance is often already part of the benefits package offered by employers.
There are two types of disability coverage: short-term, and long-term. As the name implies, short-term coverage pertains to illness needing only a short period of recovery time. The coverage here is often enough to cover your entire income for that time period. Coverage may usually be claimed anywhere between one to fourteen days after the onset of the illness or condition. On the other hand, long-term disability coverage answers a portion of your income when your illness or condition requires an extended period of recovery time. Note that such coverage is only for conditions that are not related to your work. In those cases where the illness or condition is rleated to the nature of the job, it is the Worker's Compensation that would kick in.
Disability policies do not directly cover medical needs, but provide you with income to cover other daily expenses. Social Security Disability Insurance may also apply in illnesses, but its disadvantages include lengthy approval times and a delay in the onset of payments.
Disability insurance should always be an important consideration when looking for insurance benefits. You never know when illness can strike, and it is always best to be prepared.