When dealing with a disability, timely assistance and benefits play a crucial role in facilitating a secure existence. Disability benefits ensure that one is financially protected if they are unable to work because of any impairment. However, data suggests that approximately 110 million in the country do not have long-term disability coverage. So, what’s the deal with disability coverage and disability benefits, and how can one be insured? Let’s take a look:

Understanding disability benefits
Social Security Disability Insurance (SSDI), a federal insurance program initiated by the government, offers financial benefits to individuals with disabilities and their families. This monetary assistance is called disability benefits. SSDI is provided to employed individuals who cannot perform their work functions due to a sudden disability. It is often confused with the means-tested program Supplemental Security Income (SSI), wherein the government provides financial assistance to individuals with disabilities who belong to lower-income groups. Some of the features of SSDI are:

Eligibility: One should have contributed to the SSDI Trust Fund via their payroll taxes to be eligible for disability benefits through SSDI. Individuals with financially dependent family members who have contributed to this trust fund are also eligible for SSDI benefits in the event of disabilities.

Monetary benefit: SSDI monetary benefits typically range from $800 to $1,800 per month. This is based on one’s aggregate income or the average indexed monthly earnings received till they were incapacitated due to a disability. An advantage here is that the compensation is not calculated based on the severity of the disability.

Although SSDI benefits are not affected by the other kinds of coverage, one’s long-term disability benefits can reduce over time if they are covered by SSDI.

Understanding disability insurance
Disability insurance, or disability income insurance, is designed to protect individuals from loss of income in the event of a disability. Most of these plans cover physical and mental disabilities that are debilitating and make the beneficiary unable to perform regular work tasks. The availability of disability insurance in its present form began in the late 19th century and continues to prove beneficial. The benefits offered and terms of the insurance may vary between companies, professions, and states.

Advantages of disability insurance
Financial stability: Long-term disability insurance plans typically provide beneficiaries with 60% of their pre-tax income amounts in case of a disability. Such regular financial compensation ensures that individuals with disabilities can lead financially independent and secure lives even if they cannot perform their professional duties.

Coverage for treatments: Individuals who receive disability benefits through SSDI coverage can get financial assistance for their treatment. Such plans charge minimal premium amounts and cover one’s end-to-end treatment expenses. Additionally, all individuals with disabilities are entitled to this social security benefit, regardless of their income levels.

Assistance for dependents: Disability insurance helps family members of the affected individuals continue receiving financial privileges even in emergencies, particularly if the beneficiary is the sole or primary breadwinner of the family. Such assistance can be highly reassuring during testing times.

Types of disability insurance
Short-term disability insurance: About 5% of workers in the country experience short-term disability each year, according to estimates. Short-term disability (STD) insurance covers the beneficiary for a brief period following a temporary disability. This means one can usually expect 3–6 months of coverage. As STD covers have shorter waiting periods than long-term ones, individuals may avail of their short-term benefits while awaiting the approval of their long-term disability claims.

Long-term disability insurance: Long-term or permanent disability insurance covers beneficiaries for long periods or throughout their life in case of debilitating disabilities. Some of the health conditions covered by these policies include heart diseases, mental illnesses, cancer, musculoskeletal disorders, and incapacitation due to injuries. The waiting period for an LTD cover is usually quite long, typically ranging from some months to years.

Noncancellable insurance: The plans here provide the same benefits with no increase in premium amounts over time. Further, they cannot be canceled by insurance companies.

Guaranteed renewable insurance: The policies here also provide the same benefits over time and cannot be canceled by insurance companies. However, they are subject to an increase in premium amounts.

Top providers
Unum: This reputed insurance company provides short-term and long-term disability insurance coverage, leveraging cutting-edge technology to ensure timely financial aid. It offers various services, including automated processes, efficient absence management, and easy access to mental-health resources.

Assurity®: Assurity® offers flexible coverage plans that allow beneficiaries to choose their waiting periods and the length of time they would like to receive insurance benefits. It also provides partial benefits to those who are unable to perform their work duties at their regular jobs due to a disability but can hold other types of jobs.

Guardian: This company provides beneficiaries with short-term, long-term, supplemental, and individual coverages. Guardian has been awarded an A++ rating by AM Best, which indicates the company’s financial strength.

Northwestern Mutual®: With the motto of “doing the right thing,” this company provides curated financial strategies to ensure that its beneficiaries receive adequate financial compensation. Its disability insurance packages are customized to suit each individual’s requirements. It also provides lucrative dividends that can be utilized to reduce premium amounts over time.

Disability benefits are offered by the government and several private companies in the country. The key to selecting the right policy is to check its waiting period, premium amount, benefits, availability of STD and LTD cover, the possibility of future fluctuations in premiums, renewability terms, and the availability of individual and employee-sponsored policies. One must also check if cost-of-living benefits and residual benefits are included in the package. Life is unpredictable, and a well-designed insurance plan can offer crucial assistance when dealing with unforeseen circumstances.