The confusing insurance marketplace makes the different facets of Disability Insurance tough to understand. Our experienced team can provide you with peace of mind by finding the best plan to insure your greatest asset – your ability to earn an income.
Accidents, injury, and illness happen. When you can’t work, disability insurance works for you. Get peace of mind to recover, knowing your expenses will be covered thanks to disability insurance.
Life relies on income. When your family relies on you financially, the pressure is on to cover expenses like mortgage, rent, bills, car payments, or your children’s college tuition. But when illness or injury strike unexpectedly, who is going to be able to look after you while you’re out of work?
When you can’t work because of illness or injury, disability insurance will provide 50% – 70% of your income, including bonuses or commissions. Benefits can be provided for up to two years, until you are able to return to work, or for life. Get free advice to decide what level and type of coverage will work best for you, by contacting one of our agents today.
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Your Income Safety Net
Disability insurance is your financial safety net when you can’t work, especially if:
- Your employer doesn’t provide Group Long-Term Disability Insurance
- You will need to cover medical bills from injury or illness
- Family member(s) rely on you financially
- You do not have a large savings to cover expenses until you return to work
- Your partner is unable to support both of you while you are out of work
Living and Medical Expenses Covered, While You Recover
Illness and injury strike without warning. Without planning ahead, unexpected Medical bills and living expenses can add up quickly. Disability insurance removes the distress of trying to figure out how to cover living and medical expenses, so you can focus on the rest your body needs to recover. And so that you can get back to can work and life faster.
Coverage For The Short or Long Term
When it comes to disability insurance, there are two types of policies to choose from:
- Short-Term Disability – with a waiting period for benefits from 0-14 days and benefit provided up to two years
- Long-Term Disability – benefits can be provided for the rest of your life, but has a waiting for benefit to start from several weeks to several months.
Additional types of disability insurance policies available include: Mortgage, Supplemental, Social Security, State, Self-Insurance, and Worker’s Compensation.
When Should You Get Disability Insurance?
Whether you are self-employed, have disability insurance provided by your employer, are in good health or have medical issues, there is no better time than now to consider disability insurance coverage. Today is the youngest you will ever be, and with policy premiums increasing due to older age or further health complications, get an affordable premium now and the plan that works best for you.
How To Determine Your Coverage
Determining your policy coverage can be tricky. That is exactly why our agents are here to help. Benefits are based on a percentage of your current income, with a general recommendation being to replace your monthly take-home pay, while also taking into consideration additional expenses your injury or illness can incur (such as hospital bills, medications, surgery, etc).
Let our experienced team help you define the plan and coverage that will work best for you. Because when you can’t work, you’ll happy to know you have the disability insurance policy that works for you.
Disability Policy Features
The period of time the insured must wait after becoming disabled to receive benefits. Typical waiting periods are 30, 60, 90,120,180, and 360 days. The longer the elimination period, the less expensive the policy.
The period of time the benefits will be paid following the elimination period. The benefit period could be from 2 years to age 65 to lifetime. The longer the benefit period, the more expensive the policy.
Amount of Benefit
The larger the pay-out the more expensive the policy. The benefit will not normally exceed 70% of income.
Percentage of benefit paid if policyholder returns to work and is still partially disabled, preventing policyholder from returning to work full time and earning full income.
Pays a benefit if you are unable to return to your present occupation but can work doing something else. For example, a doctor who is a surgeon that cannot return to surgery but can teach. This is the most expensive type of disability policy.
Reasonable or Any Occupation
Pays a benefit while disabled, but stops when you are able to return to work at a job that matches your education and experience. This policy is less expensive than an Own-Occupation policy.
Occupation is a factor used in determining rates. For example, a doctor’s rate would be much lower than a blue-collar worker.
These policies cannot be cancelled by the insurance company even if a change in the insured’s circumstances would make him or her a greater risk. The insurance company cannot make any changes to the provisions of the policy or add restrictions.
Presumptive disability means that you are considered totally disabled and eligible for benefits for the loss of sight in both eyes or the loss of two limbs. Some contracts also presume total disability for the loss of hearing, loss of the power of speech, or the loss of the use of two limbs.
Optional Disability Benefit Additions (May Cost More)
Protection Against Inflation
A benefit that can be added that offers a cost-of-living adjustment for inflation during a long-term claim.
Automatic Increase Rider
Automatically increases monthly benefits for a specified period of time. A typical increase is 5% compound.
Future Increase Options
Allows the insured to purchase additional benefit amounts without proof of insurability.
Capital Sum Benefit
Pays the insured a lump sum benefit up to 12 times the monthly benefit if the insured loses the sight of one eye with no possibility of recovery or has a hand or foot severed. This benefit is paid in addition to the other benefits.
To help a disabled insured return to work, this benefit will pay some of the expenses incurred when the insured enrolls in an approved rehabilitation center. This benefit is paid in addition to the other benefits.
Transplant and Cosmetic Surgery Benefit
Under this benefit, any disability arising from donating a transplant organ, improving your appearance or correcting a disfigurement will be covered by the policy.
Types of Disability Insurance Coverage
Social security provides income for both retirement and disability. To receive social security benefits, individuals must apply. Applications, quotes, and other information can be found on the social security website. Eligibility is based on being unable to work; applicants must have been disabled for five months and must expect to be disabled for at least 12 more months.
Group LTD is carried by almost half of mid-size to large employers and provides long term benefits for at least 5 years covering about 60% of salary. The premium is usually very low, does not require proof of insurability, and often is fully paid by the employer.
For individual policies, the applicant needs to qualify and go through an underwriting process, similar to the process required for life insurance. The applicant could be subject to a higher premium or even be declined based on his or her occupation, medical history, or lifestyle. Individual policies are usually purchased by high income professionals because of the cost.
Also called “group long-term disability insurance,” some states require employers to carry this type of insurance anywhere from 26 to 52 weeks.
Most employers are required to provide this coverage. The amount and duration varies by state. Workers Compensation only pays if the disability occurs on the job, and usually lasts for only a few years. The payments are low.
What Will Disability Insurance Benefits Help Cover?
When you are unable to work, disability insurance can supplement anywhere from 40-70% of your income.
Disability insurance benefits will help you and your family cover:
- College Tuition
- Car Payments
- Daily and living expenses
When Do I Qualify As Disabled?
Each plan – whether your individual or employers plan – will outline when you are qualified as disabled due to injury or illness. Once you qualify to receive benefits, you will need to provide medical evidence along with filing a claim, to receive your benefits.
Contact one of our agents today to learn when or if you already qualify for disability benefits.
Does Obtaining A Policy Require a Medical Exam?
A paramedical exam is required, but may be waived, depending on your age, health, medical history, or the amount of insurance coverage you’re applying for. Your medical information will need to be included as part of the application process, whether for an individual or employers group disability insurance policy.
The paramedical exam takes anywhere from 30-45 minutes and is provided through insurance at a qualifying health care provider, at no cost to your. This exam is used to assess current state of health (weight, pulse, and blood pressure) and in some instances, a urine or blood test may also be required. If further testing is required – such as when recurring or serious health issues are present – this exams may not be covered by insurance as is best discusses with one of our agents.
How Much Does it Cost?
The average cost for Disability Insurance coverage can range anywhere from 1-3% for males and 2-4% for females, of their annual salary.
The price of your premium will vary based on your income and the following factors:
- Policy Type – Short-Term, Long-Term, Individual policy, Employer Provided Group LTD insurance, etc.
- Applicant/Policyholder – Medical & Other Policyholder or Applicant Attributes (Sex, Gender, etc.)
- Policy Itself – Level of Coverage, Additional Benefits, the State Issued, etc.
Not sure how much your policy would cost or want to compare your current plan? One of our agents will be happy to help determine the cost of the disability insurance policy, based specifically on your situation, to help decide the disability policy that will work best for you.
What Factors Are Considered For Applicants & Policies?
When applying for disability insurance, the following factors are taken into account in addition to your health and medical history:
- Smoking History
- State of Residence
These factors are used to determine your probability of health complications with higher risk resulting in a higher premium. For example, older applicants or ones that are current or former smokers will be at higher risk of health complications resulting in a higher premium. Alternatively, the number of claims made in your state or related to your demographic can affect your premium. This is the case for females, who typically have a higher rate due to females being more likely to file a claim. Finally, the risk level of your job can also dictate the cost of your premium.
Will I Need to Provide Proof of Income?
Yes. Proof of income is required as part of your disability insurance application.
Documentation that qualifies to provide proof of income includes pay stub, your W2, or if you are self-employed your most recent tax return. We do not accept other forms of documentation, unless otherwise specified by one of our agents and approved by one of our managers.
Why Only 50%-70% of Your Income?
You choose your benefits and coverage based on your projected living and medical expenses for while you are unable to work. Disability insurance benefits will not supplement your full income, but will provide up to 50-70% of your income while you recover. This is in place to ensure people do not abuse the system. Benefits can be provided to a larger number of individuals and also as an incentive to rest, recover, and get back to work sooner.
When Do Benefits Start & How Long Are They Paid?
Depending on whether you have a Short-Term (ST) or Long-Term (LT) disability insurance, individual or employer group policy, determines when your benefits will start or for how long they will be paid.
- Short-Term Disability Policy – Starts immediately or within two weeks; provided benefits up to two years
- Long-Term Disability Policy – Can take several weeks or months to start benefits; may provide benefits for the life of the policyholder
If your employer provides Group Long-Term Disability (LTD), it is still recommended to obtain a separate individual disability insurance plan for yourself. This is to ensure you receive the full benefits you will need to cover living expense while you are unable to work.
What If I Already Have Health Problems?
If you have chronic or current health problems, you can still qualify for disability insurance coverage. In low-risk work environments with non-life threatening medical conditions, coverage can usually still be obtained at an affordable rate.
Depending on your specific health issue and history, coverage and premium costs will vary. Coverage may be modified with particular conditions excluded, or an additional premium charged in order to obtain the coverage or policy you want.
Can You Receive Disability Insurance Benefits If Receiving Government Benefits?
In some cases, you can still receive benefits from your policy, even if you are also receiving benefits from government-sponsored disability benefits schemes (such as Workers Compensation or Social Security). This varies policy to policy.
Contact one of our agents to discuss your policy and situation, to determine if this applies to you. In some instances, you will be required to apply for government benefits first, then offsetting your benefit payment through your policy for the amount received through government aid.
Disability and Income Taxes
If you pay the premium for your disability insurance, then your disability benefits are free from income tax. If your employer pays the premiums but you receive benefits,you will need to pay income tax on benefits received.
85% of Social Security disability payments are subject to federal income tax if income exceeds $34,000 individually or $44,000 jointly.
Why You Should Get Your Own Policy, Even if Your Employer Provides Group LTD Insurance
Even if you employer provides group Long-Term Disability (LTD) insurance, you should still consider purchasing your own disability insurance policy for a number of reasons.
Coverage and Taxes:
- If your employer pays the premium, you are taxed on benefits – this means if your group policy covers 60% of your income, taxes may reduce it to only 20-30%
- Group policies typically have coverage caps that are lower then individual LTD policies – most likely you will not receive enough to cover all living or medical expenses
- Higher salaried employees have a risk of being under-insured under a group LTD policy
- Coverage will not continue when switching jobs
- Fear of losing coverage may lead to staying in a job or role you dislike for longer than you should
- Depending on age and health when you switch jobs, it can be difficult to obtain a new LTD policy
What Happens If I Need to File A Claim?
When filing a claim, you are required to provide medical evidence and documentation to support your claim. Medical evidence includes blood work, x-rays, and a statement from your doctor or health provider medical certificate, stating you are physically unfit for work.
Processing time for your claim will vary depending on your policy, level of coverage, and size of your claim. Long-term policies processing times vary from several weeks to several months, with short-term policies averaging from 0-14 days.
We Can Help You Find the Right Policy
Instead of trying to navigate the confusing insurance marketplace alone, contact us today to request help from our experienced team of agents. We understand the ins and outs of the industry and will be able to help you find the disability plan that’s right for you and your family. Oh, and our expert advice is always free.
Step 1: Contact an Agent
Our expert team of agents is awaiting your phone call. We have served over 150,000 Floridians, like you, in the past 30 years.
Step 2: Compare Plans
Your agent will work with you, explaining all of your options and giving their expert advice to find the perfect plan that fits all of your needs.
Step 3: Finalize Your Policy
In one phone call, we’ll finalize your policy.
CALL MURRAY INSURANCE TODAY!