Short-Term Disability Coverage Options
Your financial situation dictates if you can go without a short-term
disability (STD) policy. Would your family adequately be provided for if
there were a sudden halt in your income? If you have a comprehensive
long-term disability policy (and you should), you likely still have a
waiting period - anywhere from a couple of weeks to a couple of months -
before you can start collecting from that policy.
After you exhaust sick days and full-paid leave (if your employer provides
it), then how do you meet expenses? Because Social Security is only paid to
individuals whose injuries are predicted to keep them from work for at least
12 months, and are so severe that no gainful employment can be performed,
it’s often not an option. Things that have been within budget now could be
quite cumbersome without steady income. Many people turn to their short-term
disability policies. When you purchase a short-term policy, you can expect
to replace between 50 and 70 percent of your income.
For most short-term disability policies, the waiting period is 0 to 14 days
with a maximum benefit period of two years. This certainly can bridge the
gap between back-to-work or to the end of the waiting period on your
long-term disability policy. Give us a call for more information on
short-term disability.
When Disabled Isn’t Considered a Disability
If you’re disabled, disability income coverage will help pay your lost
income. But how does your policy define “disabled”? If you haven’t checked
lately, you might want to take a look.
For example, Social Security defines “disability” as the inability to do the
work that you did before the injury or illness, as well as the inability to
adjust to any other type of work due to your medical condition.
The disability must also be expected to last at least one year or result in death. Social Security admits this is a tough definition, because it’s meant to be.
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If you have any other options for work, even at a lower
paying job, then Uncle Sam will deny you disability benefits. Fortunately,
the usual disability income policy isn’t quite as severe as this. However,
its definition might still be tougher to meet than you’d like, especially
with less comprehensive and less expensive policies.
For help in determining if your current coverage will meet your needs be
sure to talk with our disability income professionals. They can discuss the
definitions of disability in various policies, as well as how each will
affect your pricing and ability to qualify for the type and length of
coverage you want.
Keep Your Golden Years Golden
As many as 500,000 Americans a year buy long-term care insurance. However,
only 40% buy an inflation-adjusting policy that automatically increases the
benefit amount by 5% each year to account for rising nursing home costs.
Why is this important? Most long-term care policies specify a dollar amount
for your long-term benefits. So, if the cost of one day in a nursing
facility is $100 today, you should realize that the price of services will
change with time and inflation.
It is true that policies with an inflation-adjustment feature are more
expensive - sometimes twice as much as those without protection. However,
buying the less pricey alternative today could cost you far more later. Give
us a call to help you decide.
