The Science of Aging Well: How Your Beliefs Affect Your Health
What is disability insurance?
Disability benefits replace part of your monthly income if you experience a covered disabling illness or injury. Unlike health insurance, disability insurance benefits are paid to you directly. Whether you need them for medical bills or everyday expenses, you can use your benefits however you like.
Here’s how it works:
- You experience an unexpected, covered injury or illness.
- Your doctor confirms your disability.
- You receive a monthly benefit paid directly to you to use as you please.
Note: The timing may vary based on the elimination period (or waiting period), which refers to the time you must wait between a covered disabling illness and when you begin receiving benefit payments. - Take time to recover with less financial stress.
Why do I need disability insurance?
Many people think they do not need disability insurance. However, the uncomfortable truth about disability is that it can happen to anyone at any time, regardless of health or lifestyle.
According to the Social Security Administration (SSA), more than one in four of today’s 20-year-olds will become disabled before reaching age 67.1 With many American workers living paycheck to paycheck,2 a disabling injury or illness could become very costly, very quickly.
SSA benefits alone often aren’t enough to cover a person’s living expenses. The average disabled-worker benefit only pays about $1,537 per month,3 which is barely enough to stay above the poverty line.4
While all of this may be a bit alarming, it’s important to be prepared and know your options should you become disabled, even temporarily. Disability benefits may provide financial relief so you can heal and recover without the added stress of lost wages.
What qualifies as a disability?
A disability usually occurs due to an injury or illness that puts you out of work for an extended period of time. Several physical and psychological conditions could be considered disabling. The SSA names the following 14 categories of conditions that may qualify:
- Musculoskeletal disorders
- Special senses and speech
- Respiratory disorders
- Cardiovascular system
- Digestive system
- Genitourinary disorders
- Hematological disorders
- Skin disorders
- Endocrine disorders
- Congenital disorders that affect multiple body systems
- Neurological disorders
- Mental disorders
- Cancer (malignant neoplastic diseases)
- Immune system disorders
Visit the SSA website to learn more about specific health conditions that could qualify as a disability.
What types of disability insurance are available?
There are two types of disability income insurance: short-term and long-term.
Short-term disability insurance may replace 60 to 70 percent of your monthly income and could provide benefits for up to one year. It’s used for recovery after pregnancy, surgery, and minor accidents and injuries.
Long-term disability insurance may replace 40 to 60 percent of your income and benefits could last until your disability ends. Long-term coverage may be used for many different reasons, including cancer treatment and recovery, diabetes, chronic pain, and mental health.
In summary, anyone who relies on a paycheck could benefit from disability insurance.
While no one wants to think about the possibility of becoming disabled, it’s important to acknowledge the risk and consider disability insurance as part of a holistic financial wellness plan.
This blog is up to date as of April 2024 and has not been updated for changes in the law, administration or current events.
This article originally appeared on the American Fidelity blog.
About The Council for Disability Awareness
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