Health insurance pays a portion of your medical bills, and that helps a lot. But health insurance won't help pay living expenses when you can't work because of an illness. That’s when disability insurance can help make your life easier.
Disability insurance replaces some of your income if you can't work due to a medical reason. The coverage is usually part of workplace benefits, and many companies pay some or all of the premiums. Policies typically replace about one-half to two-thirds of your normal income. Many people will not take a job if disability and health insurance are not offered.
Who Needs It?
Anyone with a job can benefit from disability coverage. If you rely on your income or support other people, then you should have disability insurance. It's also recommended for people who have jobs that require physical labor or working in dangerous situations.
How it Works
To file a disability claim, you have to have a doctor's opinion that your illness or injury is disabling. You also need an estimate of how long the disability is supposed to last. You may have a waiting period before benefits start. You also might have to use the paid leave you have at your job before disability kicks in.
Short-term and long-term disability is available. Short-term provides coverage from a few weeks to a few months. Long-term covers you if you are likely to be disabled for at least six months. If you will be permanently disabled, then you will likely have to apply for government disability.
Disability insurance is useful because it helps with expenses when you can’t work. It makes being out of work and having an illness a bit easier to handle.