Disability Insurance 101: What Personal Injury Victims Need to Know

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You may become a disability customer in the blink of an eye. A swerving truck, an icy patch in the road, a distracted driver—tiny moments that may determine whether you’ll be back in the office tomorrow or laid up for weeks in the hospital.

Disability is a serious problem that impacts our workforce and our communities. In fact, it’s estimated that disability impacts over 60 million Americans. The majority of people in that category (nearly 14%) suffer from mobility problems—difficulty walking or climbing stairs. Another ten percent of people on disability suffer from cognition problems. Many of these are on permanent disability, but what about those people who suffer temporary injury and inability to work?

What is Disability Insurance?

This insurance guarantees income when you are unable to perform your work duties. Your employer provides it, but you must file when you’d like to receive your benefits. It kicks in after an initial “elimination period” which can be long or short depending on your insurance. This period begins on the date of the accident or injury regardless of the day you file your claim.

When You Need It

Disability insurance can be critical if you are injured in a car accident because it may be the only income you’re able to count on. If your injury leaves you hospitalized or on bed rest or even recovering from surgeries, you may be unable to complete the duties of your job. Good disability insurance can help you get through that rough spot with a portion of your income. And this isn’t really an unlikely possibility. Over one in four adults will experience a disability of 90 days or more before reaching 67. That number may initially be shocking, but when you think of accident recovery—along with the high rate of accidents in the US—it’s not that surprising.

Types of Coverage

Just as the length of coverage can vary, so can the type.

Short-Term Disability

Short-term coverage will have a benefit period of two years and a waiting period for the coverage to begin of up to 14 days.

Long-Term Disability

Long-term disability coverage may have a waiting period of several weeks to months but provides benefits from more than two years to a lifetime.

These policies feature two critical consumer protections that are key for ensuring continuity of care at a predictable price, maintaining your lifestyle and providing peace of mind:

Noncancelable

The insurance company cannot cancel the policy, except for failure to pay premiums. You can renew your policy annually without the price spiking or benefits being cut.

Guaranteed renewable

The insurance company must renew the policy with all the same benefits. The insurance company cannot cancel the policy, but they can raise your premiums. To comply with regulations, they must raise premiums across all policyholders in your rating class.

These finer points about making payments on time or when a company can raise your rates are critical to continuity of care and affordable coverage.

Other considerations will also affect your coverage and cost:

Options

You may have the opportunity to buy add-on insurance—but your company will determine when.

Benefits Coordination

Insurance companies can vary the benefits they offer depending on the totality of all disability benefits you receive. Your policy considers how much you receive from all your policies combined. An additional policy makes up the difference not paid by the others.

 Cost of Living Adjustment (COLA)

Disability benefits change over time to address COLA increases as measured by the Consumer Price Index.

Residual or Partial Disability Rider

This rider may allow you to return to work part-time and collect part of your salary while still receiving partial disability payments.

Return of Premium

The insurance company may be required to refund part of your premium if no claims are made for a specific period of time as specified by the policy.

Waiver of Premium

If you have this waiver, you will not have to pay premiums if you are disabled for more than 90 days.

(Source: Insurance Information Institute)

Understanding disability insurance can be the difference between riding out the storm and bankruptcy. Knowing the basics can get you pointed in the right direction.

If you have been injured in an accident and are unsure what could be compensated, contact McCraw Law Group. We can help by explaining your options.