A disability insurance policy can protect your family, your assets, and your lifestyle if you become ill or disabled.

Unfortunately, debilitating health problems often arise unexpectedly. Especially if you have dependents such as young children, a spouse without income, or elderly relatives, it is important to have some means of income replacement in the event that your ability to earn your paycheck is compromised. Fortunately, disability insurance replaces a portion of your monthly income if injury or illness prevents you from working. Disability insurance is either offered by an employer (group plan) or purchased by an individual (individual plan). 

Group Plans

While some employer-offered plans are helpful, they also come with limitations. Benefits typically only replace between 40-60% of your income and may not last for long-term illnesses. Many group plans have benefit caps, generally only insure your regular base salary, and may even require you to seek other avenues of work after a certain period of time. 

Individual Plans

Individual disability insurance can supplement the group plans provided by employers, allowing you to insure an additional 10% to 20% of your income. In some cases, you may even be able to get individual coverage for overtime or bonus income. Notably, an individual plan stays with you in the case that you change employer, and the money you receive is not offset by other benefits such as Social Security.

Short Term vs. Long Term Disability

Short Term Disability Insurance

Short term disability insurance, or sick leave, begins as soon as you’re unable to work due to an illness, injury or the birth of a child. Most Long Island employers provide some type of coverage through group plans, ranging from just a few days to as much as one year. In some cases, the number of weeks in which you are eligible for sick leave is based upon how long you’ve worked at the company.

Long Term Disability Insurance

Long term disability insurance takes over once your short-term disability benefits run out. While some employers provide some level of long-term disability insurance, it may be prudent in most cases to buy an individual long-term disability plan or to supplement your employer-based insurance.

Fortunately, the professionals at Craig James Financial Services, LLC have years of experience in dealing with disability insurance. Call now at 631.393.2888 for a complimentary consultation to see what disability insurance options are best suited for your financial profile.