Disability income insurance, or DI insurance, ensures people maintain an income if they lose their ability to work. There are several vehicles in which to obtain disability income insurance. For instance, disability income is often a component of group insurance. Through an employer, you can get long-term disability income, which can see you through until about age sixty-five, depending on where you work. Employers also offer short-term disability income insurance, which typically has a maximum of two years.
The difference between a long-term and short-term disability income plan is the elimination periods. Essentially, an elimination period occurs after you become disabled and before the benefits kick in. For short-term plans, there’s usually a 0/0 clause; this means that there’s zero waiting periods for sicknesses, as well as accidents. In some cases, there’s also a thirty-day waiting period. As for long-term, the period can be anywhere from 30/60/90 days and 6 months, and sometimes even up to a year. Because of the different waiting periods, you can have both short-term and long-term disability income insurance. This will ensure continuous coverage; in addition, it helps lower premiums, making both more affordable.
With group disability insurance, you need to be aware that it does not always cover disabilities incurred on the job. Some plans do, but not all. Because most group disability plans do not cover on the job accidents or illnesses, they’re generally inexpensive. So keep in mind that while the plan may be cheap, it may not provide the coverage you need.
Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions. So if you have any questions or concerns, comment below and your question may be the topic of our next video!
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