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Have You Considered Buying Disability Insurance?

Author : Jeff

Updated : August 3rd, 2018

It is a cherished dream for any individual to have a good career so that one can pay bills on time, buy that dream home and car and enjoy financial freedom. Living life in the fast lane might not leave us anytime to think about possible hurdles.

What if something goes horribly wrong and those paychecks stop even before you retire? All your future plans and dreams come crashing down. That’s when disability insurance (DI) comes in. It provides an income to you and your family in case you are not able to work because of an injury or illness. Disability Insurance gives you the courage to dream without thinking about financial hurdles and you can stand on your own two feet till you reach your retirement and beyond.

What Is Disability Insurance (DI)?                                disability

Disability can be defined as a physical, mental or psychological inability to fulfill your occupational duties. It can be temporary or permanent.

Your ability to earn an income is usually considered your biggest asset. Disability insurance protects the beneficiary’s income against the risk that disability will make working impossible. It includes paid sick leave, short-term disability benefits and long-term disability benefits.

Disabilities Covered By The DI

Major illnesses, injuries and the conditions which one develops with age are also considered. Here are the major categories of illnesses that are covered by the DI.

  • Musculoskeletal Systems – Under this category major dysfunction of joints and spine related issues which disables a person from working are included.
  • Special senses and speech – Loss of vision or speech related issues.
  • Respiratory system – Conditions such as chronic pulmonary insufficiency, Cystic Fibrosis, Pneumoconiosis, Bronchitis etc are included.
  • Cardiovascular system – Chronic heart failure, Ischaemic heart disease, Peripheral arterial disease etc comes under this category.
  • Digestive system – Includes Short bowel syndrome (SBS), Inflammatory bowel disease (IBD), Chronic liver disease Gastrointestinal hemorrhaging from any cause etc.
  • Genitourinary Impairments – Impairment of Renal function, Nephritic syndrome with anasarca, persistent for at least 3 months despite prescribed therapy.
  • Hematological Disorders – Chronic anemia, Sickle cell disease or one of its variants, chronic thrombocytopenia.
  • Skin Disorders – Conditions such Bullous disease and chronic infections of the skin or mucous membranes, Dermatitis etc.
  • Endocrine Disorders – Hyperglycemia, Adrenal gland disorders, chronic hyperglycemia, Diabetes and other pancreatic gland disorders etc.
  • Congenital Disorders that Affect Multiple Body Systems: Category of Impairments includes Congenital Disorders that affect multiple body systems, non-mosaic down syndrome etc.
  • Neurological – Epilepsy, Brain tumors, Parkinson Syndrome, Spinal cord or nerve root lesions due to various causes.
  • Mental Disorders – Schizophrenia, paranoid and other psychotic disorders, Intellectual disability, Anxiety-related disorders, Somatoform disorders etc.
  • Malignant Neoplastic Diseases – Category of Impairments includes Soft tissue tumors of head neck, soft tissue sarcoma, Lymphoma, Leukemia etc.
  • Immune System Disorders – Systemic lupus erythematosus, Systemic vacuities, Systemic sclerosis, Polymyositis and dermatomyositis, Immune deficiency disorders, excluding HIV infection, Inflammatory arthritis etc.

What Are The Different Types Of DI?

Based on the nature and coverage one has six kinds of insurance to choose from.

Individual Disability Insurance

This insurance is for people who are self employed or entrepreneurs. The benefits and premiums may differ depending on the need of the individual in regards to the nature of profession, risk involved, state of residence. Higher the premium wider the coverage.

Business Overhead Expense Disability Insurance

Business overhead expense disability insurance is intended to refund a business for the overhead expenses incurred in case the owner suffers a disability. This insurance can help the owner with business expenses such as rent or mortgage costs, maintenance fees and other business related expenses.

Key-Person Disability Insurance

When a key person in a business becomes disabled, this insurance can give the business owner the benefits of continuing with the business transactions that the key person has left behind. This enables the business to move forward and go on without losing revenue and profit.

High-Limit Disability Insurance

This policy entitles the insured to a 65 percent income replacement benefit regardless of income level. This disability insurance is on top of a coverage and the most sought after.

Employer-Supplied Disability Insurance

This insurance is acquired by an employer for his employee. It is important to note that this insurance is only valid when the employee is hurt or disabled while working.

National Social Insurance Programs

The Federal Insurance Contributions Act (FICA) is a United States law that requires employees to contribute a part of their earnings to fund Medicare and Social Security. Employees who have become disabled can receive this income insurance for at least one year. Income insurance payments begin on the sixth month of disability.

It is a program managed by the Social Security Administration that insures a worker in case of a mishap. Disability insurance offers income protection to individuals who become disabled for a long period of time, and as a result can no longer work during that time period. Employees, who’ve paid the Federal Insurance Contributions Act (FICA) tax for a certain amount of time, are eligible to receive the Social Security disability income insurance.

How Much Does It Cost?

Disability insurance can be purchased as an individual policy or can be acquired by an employer for the employees. The cost of the disability insurance vary based on many factors such as benefit period, age of the individual, nature of employment, income etc.

Individuals who purchase a disability income policy can expect to pay about 1 percent to 3 percent of their annual salary.
Employers generally provide short or long term group disability coverage which is deducted from an employee’s salary.

How To File A Claim?

If you have been insured by your employer under the social security scheme then you can go on to the Employment Development Department site and can file a claim online. It is the easiest, continent and secure method or you can file it through mail.

Eligibility criteria for DI

DI benefits can be paid only after you meet all of the following requirements:

  • You must be unable to work for continuous eight consecutive days.
  • You must be employed or have been actively looking for work at the time you became disabled.
  • You must have lost wages because of your disability or, if unemployed, should have been actively looking for work. You must have earned at least $300 from which SDI deductions were withheld during a previous period.
  • You should have been under medical supervision of a licensed doctor during the first eight days of your disability.
  • You must complete and mail a claim form within 49 days of the date you became disabled or you cannot avail the benefits.
  • Your doctor must certify you as disabled.

Do I Need Disability Insurance?

If you believe in having security and peace in life and have a job then yes you need to have insurance. A recent social security fact sheet states, “Just over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67.” And if disease or injury renders you disabled early in your working life, the lost wages can be worth much more than a house or a car.

Don’t go the way where life takes you, take life the way where you want to go. Let not uncertainties change your life. Get a Disability insurance and anchor your life to the safe harbours.

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  1. I applied for unemployment in New Mexico because I wasn’t getting my full-time hours and my checks were never correct I was constantly fighting with the company now I’ve exhausted my unemployment benefits and they sent me a questionnaire about my work and it says adjuctation what does that mean.. I am extremely frightened

    1. Amal,

      Adjudication is like an “Appeals” process. You may be asked to present facts and paperwork relating to your claim. If everything is fine with your claim, please face it with confidence. You’ll be given a sound hearing.

    1. Carolyn,

      If this is your initial claim, it will take a min. of 7-10 business days for the determination to be made. Please reach out to the Unemployment Office for more.

    1. David,

      Please let us know the state you’re writing from. You can also visit the Unemployment Office’s official website for phone numbers.

    2. My initial unemployment benefits run out next month. How long does it take for the extension to be determined? As I havent found suitable work. And have met all requirements to find employment. Filed in TX. If I qualify for benefits do I automatically qualify for an extention?

      1. Le,

        The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  2. I COLLECTED ABOUT $5000 OF UNEMPLOYMENT INSURANCE WHEN I WAS WORKING AND NOW THERE IS A PENDING COURT CASE AGAINST ME OUT OF PHOENIX TO GO TO COURT FOR 21 COUNTS OF FRAUD..WILL I GO TO JAIL? I AM SOO SCARED.JOJO

    1. James,

      The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  3. I am Disabled I have had several surgeries on my lower spine. I found that I was not able to male it die to Bills became overwhelming.
    I got a Job with S3 security in Tallahassee f. Where I found out that all company rules were online and They said I needed to find them and opine to them. I told them I was with Dyslexia and I. could not find them. and 2. if I could have would not have been able to remember them. this is one of my life time Disabilities. I asked to be explained the Rules but was not. For 6 mounts I was praised by the places I worked. Then recently the Sargent told me to help a student locked out there Apartment. So I did. Next day he wanted to write me up for doing what he told me to do. I told him No I would not sign a demerit that would follow me around for ever Paper work does that! I all ways did the best I could. The Captain had made a open threat that he would do all he could to take badges and make us look bad to Fla. AG. I had hurt my ankle and am getting over it. They say the wishes of Property manager was reason I was Terminated with not following post orders. Not signing the forms excepting the wright ups. With just having Epidurals to ease the Spinal pain and them being 1/2 done I had attitude to being lied on by my Sargent. When I was told to do a job. I am kinda Glad I am out of there. No Supervision just the Sargent larking in shadows waiting to wright me up to make him look good so it seemed. I had to use my own Ins. to go get help for my leg. Now I don’t know if I can get Unemployment due to what they say I did after suitability doing the best I could to keep the Complex and Students as safe that I could.

    1. William,

      UI benefits are offered to claimants who’re able and available for work. Please call the Unemployment Office for clarification. Hope you get well soon!

  4. I have been trying to fill out unemployment application on line, but it will not let me put my social security # in the spaces
    required.

  5. From 1/2018 to 10/2018 I worked for a Merriville-based organization but I live in Illinois. The employer told me I couldn’t claim unemployment from Indiana because of my Illinois residency. Yesterday, I learned that I should have been able to. Can I claim those benefits now? I was unemployed from 10/19/2018 until 8/24/2019.

  6. I am trying to file a new unemployment claim on line and the link says it cant be reached. Are you experiencing any web site problems?

  7. I RECIEVED A”MY DOCUMENT” DATED 8/26/2019-TODAY STATING I DID NOT SEARCH FOR 2 JOBS LAST WEEK…BUT,1- 1/2 DAYS AGO, EARLY SUNDAY MORNING, JUST LIKE I HAVE FOR 9-WEEKS,I DID WHAT THEM SYSTEM TOLD ME TO DO. I FILED MY WEEKLY BENEFITS TELLING Y’ALL THAT ON THURSDAY 8/23/2019 I BEGAN WORKING AGAIN. I TOLD ON MY CLAIMING WEEKLY BENEFIT FORM THAT I ALSO WORKED FRIDAY. I TOLD THE AMOUNT OF MONEY I EARNED PER-HOUR, I TOLD THAT I I worked 16hrs for the week ending 8/24/19,i gave the total amount,and i told i have not got 10 cents of the money yet,and $12.75×16 is not more than $326.00. I just got home to learn payment is being held,once again i’m being punish for an unemployment crime i did’nt commit. Four hours of interviews last week led to me getting hired, that led to 16hrs of work,that was reported within the rules. I did everything right.

    1. Please register with PAcareerlink and attend the RESEA orientation as required and take the necessary documents with you. Then
      begin an active job search. The state wants to see this activity and is done in order to receive your benefit compensation.

      Take care

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