How Does Disability Insurance Work?

If you have disability insurance, whether through work or on your own, you may be unsure about what it does. The basics are that it will help with your finances if you are unable to work due to a disability. 

That being said, there are some things that you need to understand about how disability insurance works. 

You are going to have to pay a premium every month. If you get insurance through your employer, your company may pay this premium without you even realizing it. Your premium may vary depending on your age, health, and the types of coverage that you want. 

If you ever need your disability benefits, you will receive a portion of your regular salary. This is usually between sixty and eighty percent of your normal salary. Depending on your plan (and who you get it through), it may be taxed, or it may not. Generally, it isn’t taxed, unless it is through your employer. 

You also need to understand the benefit period. This is the length of time that you can receive your benefits. Generally, short-term disability will cover up to a year. Long-term may take effect until retirement.  

There may be a waiting period before you are able to collect your benefits. Short-term benefits are often paid quicker than those that are going to be long-term. 

You also need to know what is considered a disability for your plan. Since every plan is different, you need to read the fine print. If you are able to work a desk job, instead of your normal job, you may not qualify. 

If you want to make sure that you are protected, in case you are ever injured or disabled, don’t hesitate to contact Phil Klein Insurance Group in West Bloomfield, MI.