Most people rely on the income from their jobs to take care of bills and other necessities. But certain illnesses, accidents, and disabilities can make it difficult, or even impossible, to work. Disability insurance is meant to provide protection in case something like that were to happen, and many people have found their disability insurance to be a lifesaver. Working individuals have the option of purchasing policies for themselves; some employers will purchase group coverage for all of their employees. If you’ve thought about getting a disability insurance policy, whether for yourself or for your employees, here’s what you need to know about the two main types that are available:
Long-term disability insurance
Long-term disability insurance would protect you against more serious illnesses, accidents, and injuries that permanently keep you from working again. In order for long-term disability insurance to pay out, the insurance carrier would need to see documentation from your doctor, stating how long you’ll be out of work and the details of your condition or injury. Before you receive your first check, there is a waiting period. The waiting period varies depending on your policy, but typically varies anywhere from 90 days all the way up to one year. If you are already receiving benefits through a short-term disability policy, those payments may automatically turn into long-term disability payments after a certain amount of time passes. Depending on the extent of your disability, you may also want to apply for Social Security Disability Insurance (SSDI) during or after you receive benefits through your long-term disability policy.
Short-term disability insurance
With this type of disability insurance policy, you would recoup a portion of your lost wages if you were out of work for a limited time due to an illness, accident, or injury. You would usually begin receiving payments from short-term disability after you use up any paid sick or vacation days. The payments in the beginning are often larger and may be close to what you normally receive from your regular salary, but after a few weeks are usually reduced to about 60 percent (or less) of what you earn. Although it varies by the specific policy, short-term disability payments usually last for about six months. Like with long-term disability insurance, you’ll also need to provide documentation from a doctor before you start receiving payments, and there is also a waiting period.
If you have any questions about disability insurance and the options available to you, you could always speak with an insurance agent, who can help you find a policy to match your budget and needs. Alternatively, if you have other types of insurance policies currently (such as health or car insurance), you may want to find out what types of disability insurance they offer.
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Consider the benefits of selling even just a small portion of your future payments. When you sell just some of your future payments, you can receive money upfront. The lump sum payment you receive can make it easier to catch up on bills that may have accumulated as the result of your injury. By selling just a portion of your future payments, you can take care of any immediate financial needs that need to be addressed, but you can do so while also keeping the remainder of your payment stream intact. And should you decide later on that you want to sell more payments, Peachtree will be here to help. To learn more about your different options and to receive your free quote, contact Peachtree Financial Solutions today.
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.