With so many Americans living paycheck to paycheck regardless of income level, having the proper disability coverage can mean the difference between making it through a disability and financial hardship that can be challenging to recover from. Strokes, bad car accidents, overwhelming anxiety/depression and various disease diagnoses like MS and cancer can either temporarily or permanently affect your ability to do your job. We often hear “I’m covered at work”, which may be true, but it often isn’t to the benefit level they think it is nor have evaluated what that means to their ability to pay monthly expenses. Here at Yorkshire Insurance Advisors, LLC, we’ll be sure to evaluate how your existing coverage meets your monthly expenses, and if not sufficient, we will help determine the best options fill that gap.
Disability coverage comes in two basic types:
Short-term disability is most often only available on a group basis through your employer and is first to start paying a disability benefit in as little as two weeks after the disability begins, and can extend up to a year, but most typical would be 3 or 6 months. The sooner the policy starts paying benefits, the more expensive you can expect the premium to be all else being equal. Choosing which elimination period (waiting period before benefits start) is most often based on how much you’ve saved in your emergency fund to cover expenses initially should something happen short term.
Long-term disability most often is coordinated with short-term disability so that when short-term disability benefits end, long-term disability benefits start should the eligible disability continue, but should be confirmed since it’s possible there’s a gap that you need to plan for if it exists. Long-term disability typically starts at 3, 6 or 12 months and has benefit periods anywhere from just 5 or 10 years, to age 65, 67 or 70. Again, the longer the benefit period, the more expensive you can expect the premium to be, all else equal. Long-term disability often isn’t an automatic coverage at work (may need underwriting), but is typically offered if short-term is, and should be considered as part of your disability protection plan due to the lower group rates normally experienced. Individual long-term disability coverage can work together with any group coverage at work, but it’s important to understand how group coverage vs individual coverage works both in premiums (not fixed) and coordination of benefits with Social Security Disability, to be sure you know exactly what overall benefit you can expect between policies.
Here at Yorkshire Insurance Advisors, LLC, we’ll be sure to help evaluate the pros and cons of utilizing benefits offered at work, a trade association (like the ADA for dentists) and/or completely independent individual coverage. They can all be different in their definitions of disability, taxation of benefits and coordination of benefits with Social Security Disability for example. There’s a reason some policies have less expensive premiums than others, and it’s very important to understand those reasons before purchasing any disability coverage.
We invite you to schedule an initial consultation at 262-366-2702 or e-mail us at .