| What is Disability Insurance? | | | | Types of Disability Insurance |
| | | | |
| "The Social Security and Supplemental | | | | Most people are familiar with two types of |
| Security Income disability programs are the | | | | disability insurance: short-term disability, |
| largest of several Federal programs that | | | | and long-term disability. Short-term |
| provide assistance to people with | | | | disability insurance is included as part of a |
| disabilities. While these two programs are | | | | benefits package with many different |
| different in many ways, both are administered | | | | employers, and usually provides an income in |
| by the Social Security Administration and | | | | the early part of disability. Short-term |
| only individuals who have a disability and | | | | disability insurance generally provides |
| meet medical criteria may qualify for | | | | coverage for a period of several weeks, and |
| benefits under either program." | | | | does not exceed a two-year term. |
| | | | |
| - Social Security web site, June 2006 | | | | Long-term disability, however, can last for a |
| | | | period of several years. These types of |
| The Social Security office will want to check | | | | policies may be included as a part of |
| your medical history to be sure you qualify | | | | employment, in a benefits package, but many |
| for disability benefits. The Social Security | | | | purchase these disability insurance policies |
| office is one way to get disability benefits, | | | | individually. |
| but in most cases these benefits will not be | | | | |
| substantial enough for families. | | | | As far as disability insurance goes, however, |
| | | | there are still more policies to learn about. |
| Disability insurance can be obtained through | | | | One type of disability insurance is the |
| any number of insurance companies. In the | | | | Own-Occupation Disability Insurance. The |
| event that you are disabled, this insurance | | | | definition of this policy reads: |
| will serve as financial protection. You will | | | | |
| receive a percentage of your gross income | | | | "The inability to perform the material and |
| from your disability insurance policy, income | | | | substantial duties of your regular |
| that will ensure your own financial safety. | | | | occupation, the insurance company will |
| | | | consider your occupation to be the occupation |
| You do not have to go through the Social | | | | you are engaged in at the time you become |
| Security Office to take out a disability | | | | disabled, they will pay the claim even if you |
| insurance policy, nor to receive the benefits | | | | are working in some other capacity." |
| from that policy. The Social Security | | | | |
| disability program is not related to any | | | | Another kind of disability insurance is the |
| disability insurance policy that you take | | | | Income Replacement Insurance. This is a very |
| out. | | | | popular type of disability insurance, and |
| | | | most insurance agents are familiar with this |
| "Individual disability insurance is truly a | | | | policy. The language of this type of |
| basic concept. It is an insurance product | | | | disability insurance reads: |
| designed to replace anywhere from 45-60% of | | | | |
| your gross income on a tax-free basis should | | | | "Because of sickness or injury you are unable |
| a sickness or illness prevent you from | | | | to perform the material and substantial |
| earning an income in your occupation. Every | | | | duties of your occupation, and are not |
| disability insurance policy from every | | | | engaged in any other occupation." |
| insurance company is very different, this is | | | | |
| not a product to simply shop for the most | | | | Common in employee benefits packages, Gainful |
| competitive rate. To buy the cheapest | | | | Occupation Coverage is another popular form |
| disability insurance policy on the market is | | | | of disability insurance. The language here |
| to throw money away. The odds of getting paid | | | | is worded very carefully: |
| a monthly benefit under a cheap contract may | | | | |
| be significantly lower than receiving | | | | "Because of sickness or injury you are unable |
| benefits from a quality contract." | | | | to perform the material and substantial |
| | | | duties or your occupation, or any occupation |
| - About Disability Insurance web site, June | | | | for which you are deemed reasonably qualified |
| 2006 | | | | by education, training, or experience. |
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