Private disability insurance is the insurance your employer offers you when you start a new job. There may be a short or very long waiting period before the insurance takes effect, and during that initial enrollment period you may have small amounts deducted from your checks to cover the monthly premiums. Short-term disability may cover you for up to two years while you are unable to work, while long-term disability may cover you until retirement. However, before you get excited about having long-term disability coverage, you should understand some things about what this type of insurance policy does not cover and whether or not it is a good value for you.
Long-Term Private Disability Insurance Does Not Cover Pre-Existing Conditions
If you are already using a wheelchair to get around, you have a brain tumor, or some other pre-existing condition that could impact your work later on, private disability insurance does not cover these. In some instances, some private disability insurance companies ask for access to your pre-employment physical before signing you up for their policies. This is to fact-check your doctor's statements of your personal health against company records and screen out pre-existing conditions so that employees cannot place claims against their policies in the future for these conditions. While this type of insurance does not cover your current physical challenges, it can and does cover any future issues you may have.
Long-Term Disability Insurance Can Help Pay Bills Until You Receive Federal Disability Benefits
Long-term disability insurance from your employer is very different from disability benefits provided by the Social Security Administration. However, if you find that you need your private disability insurance benefits and you file a claim for long-term benefits with your private insurance provider through your employer, these benefits can help pay some of your bills until you have applied for disability benefits with Social Security. Benefits with Social Security can take several months to go into effect, and they are not always guaranteed, but if you have private disability insurance you will at least have some coverage and some money for as long as you need it.
Long-Term Disability Insurance Only Pays out at Sixty to Seventy Percent
The one down side to private long-term disability insurance is that it only pays out between sixty and seventy percent of your gross wages for the year prior to your injuries. Hiring a lawyer will not get you more money if the insurance contract is clear in its limitations and restrictions. However, this amount is still better than nothing at all. If you want to be sure you are getting a decent value from your private disability insurance, have a lawyer (like one from Iler and Iler) who is well-versed in this area take a look at the insurance contracts before you sign.