Every worker plan to retire eventually and earn enough retirement income to live comfortably. However, data compiled by the Social Security Administration (SSA) indicates that only about three-fourths of the workers who are now 20 years old will be able to reach full retirement age without suffering a disabling injury or illness.
So, how should one prepare for the contingency of a disabling injury or illness. The SSA-administered Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) benefits may be one option. Another option could be short-term and long-term disability insurance policy benefits through an employer or on your own. It helps you plan for such an unfortunate contingency well in advance.
Short-term and long-term disability insurance policies
Insurance companies offer short-term and long-term disability policies for employees to take care of a contingency where a disabling injury or illness renders an individual unable to work. You can either purchase such a policy on your own or receive it as a benefit from your employer. The premiums of the insurance policy would depend upon the value and benefits of the policy.
As the name suggests, short-term policies are supposed to insure workers in the short run. The benefit period ranges from three to 12 months. Long-term policies, on the other hand, are intended to insure workers for injuries or illnesses that prevent them from working in the long run. They may have benefit periods ranging from anywhere between two and 10 years or even longer depending on the policy that you choose.
The cost of a disability insurance policy also differs according to the waiting period. The waiting period is the time that must lapse between the date on which you got disabled and the date on which the payment of benefits under the insurance policy is to start. Naturally, disability insurance policies with shorter waiting periods are more costly than those with longer waiting periods.
How much does short-term and long-term disability insurance pay?
In case you buy a policy directly from an insurance company, you will be free to choose the following terms:
- Benefit period
- Waiting period
- Amount paid as benefits
However, if the disability insurance is offered by your employer as an employment benefit, the terms of your insurance policy will be decided by your employer though you do not have to pay the premiums in this case.
As for the benefits, a short-term disability policy generally pays 70% to 80% of your weekly earnings. On the other hand, long-term policies pay about 60% of what you were earning when you were working.
The disability insurance payments that you receive through a policy paid as an employment benefit is taxable income that you must report to the IRS. However, the same is not true for a disability insurance policy for which you pay yourself without any contribution from the employer.
Learn more about disability options from Law Firm
Navigating through the Social Security Disability (SSD) benefits process is a complicated and challenging task. Therefore, the guidance of an experienced SSD lawyer may be essential to win the benefits you need and deserve. Contacting a disability lawyer at Law Firm can help in claiming long-term and short-term disability insurance benefits. Schedule an appointment with us for a free consultation and claim evaluation.
About Author :- Francis Babet loves pursuing excellence through writing and has a passion for Legal. He currently writes for the Disability law Firm, a USA Based Law Firm that provides Short-term disability, SSD, SSI, SSDI, Personal Injury, and Disability pay. His work has been published on various sites related to Social Security Disability, Supplemental Security Income, Disability Benefits and Disability Approved.