What Does Disability Insurance Cover?
Disability insurance provides financial protection for individuals who are unable to work due to illness or injury. The coverage typically includes several key components:
- Income Replacement: Disability insurance primarily offers a percentage of your pre-disability income, usually ranging from 50% to 80%. This helps maintain your standard of living during periods when you're unable to earn a wage.
- Short-term and Long-term Coverage: Policies can vary in terms of duration. Short-term disability typically covers you for a few months, while long-term disability can last for years or until retirement age.
- Own Occupation vs. Any Occupation: Some policies cover you if you cannot perform your specific occupation ("own occupation"), while others may require you to be unable to work in any job ("any occupation").
- Rehabilitation Services: Many plans also cover vocational training, rehabilitation, and job placement services, aiding a smoother transition back to work.
- Additional Benefits: Some policies provide coverage for partial disabilities, cost-of-living adjustments, and other benefits to support the insured.
Understanding what is included in your disability insurance policy is crucial to ensure comprehensive financial protection in the event of an unexpected disability.