Although most of us don’t like to imagine a scenario where we sustain an injury—due to a serious accident—it’s important to understand what happens after the fact. Surgeries will likely be required, along with extensive treatments, and perhaps, months or even years of recovery. Disability Insurance Coverage can provide crucial financial support during such challenging times, helping you maintain financial stability while focusing on your recovery.
You may have a small reserve tucked away that will sustain you for a couple of weeks or months, but what happens after that time? What if you are unable to return to work? You could face mounting bills and tremendous financial burdens. Your biggest asset is not your home or current investments, but rather, your ability to go to work and garner a suitable income.
When that is taken away, you might feel like you have few options. However, if you have an adequate disability insurance coverage policy, many of those financial burdens could be eliminated.
What Is Disability Insurance?
There are many misconceptions surrounding disability insurance, leaving people unknowingly at risk. Disability insurance is private insurance, most often obtained through an employer or individually. It is meant to cover lost wages, as a result of a non-work-related illness or injury. It should not be confused with Worker’s Compensation or Social Security Disability Insurance.
Types of Disability Insurance
There are two types of disability insurance: short-term and long-term.
- Short-term disability (STD) benefits are intended to offset lost wages for a short period. After the designated waiting period—typically about five to eight days from the date of injury or illness—your short-term benefits will extend for a period that is less than one year. Generally speaking, STD benefits will cover up to 80% of your normal income.
- Long-term disability (LTD) benefits are intended to cover longer periods of disability. The specific coverage details will be dictated by your policy, but most LTD plans have a waiting period of at least 90 days and only cover up to 60% of your usual income. They are meant to be used after your accrued sick time and short-term disability benefits have been exhausted.
Do I Need Supplemental Insurance?
Although many Wisconsin employers do provide some form of disability insurance coverage to their workers, as part of a benefits package, it is not required by state or federal law. In addition, while you may qualify for benefits under your employer’s group disability policy, your benefits may be insufficient to adequately sustain your current lifestyle.
Under such circumstances, you may wish to consider a supplemental policy that covers beyond what your employer offers. Much like other forms of insurance, disability insurance benefits vary between plans, so it is critical to understand what your policy offers in cases of injury or illness.
For example, some long-term disability plans will afford coverage for a set number of years, such as five or ten years, while others will guarantee coverage until the age of 65 or later. Additionally, certain policies will provide benefits if you are unable to engage in the occupation for which you have been trained, while others restrict benefits to those unable to work at all.
Is My Insurance Enough?
To illustrate the importance of having sufficient disability insurance to suit your individual needs, consider the following scenario:
A surgeon who sustains a hand injury may be unable to perform surgeries but may be qualified for employment at his or her local supermarket. Because the surgeon is not deemed completely disabled, he or she could be denied long-term disability benefits if the plan restricts coverage to total disability.
Even if you are eligible to receive Social Security Disability benefits, it can take a great deal of time to file and process all of the forms required through the application process. If your application is initially denied, an appeal can take years to complete. Both short-and long-term disability benefits help to offset the financial burden while you heal or await the instatement of more permanent disability benefits.
Because disability benefits can be confusing and vary greatly between policies, it is recommended that you consult with a qualified insurance agent in order to select the policy that best meets your individual needs and budget.
Personal Injury Attorneys
In addition to having the right disability coverage, if you were recently injured due to a serious accident, it’s important to contact a personal injury attorney right away. At Doar, Drill & Skow, our experienced attorneys offer free consultations and will thoroughly review your case to see if we can help.
DISCLAIMER: The Doar, Drill, and Skow blog is intended for general information purposes only and is not intended as legal or medical advice. References to laws are based on general legal practices and vary by location. Information reported may come from secondary news sources. We do handle these types of cases, but whether or not the individuals and/or loved ones involved in these types of situations choose to be represented by a law firm is a personal choice we respect. Should you find any of the information incorrect, we welcome you to contact us with corrections.