Disability Coverage and How to Maximize it

Disability Coverage

Disability coverage falls into short-term and long-term disability insurance. A disability is any injury or illness that limits your ability to work. Insurance companies do not treat all disabilities the same, because they’re not the same. High-earners, like physicians, often combine short and long-term policies to maximize their disability coverage and protection. In this article, we’re going to take a close look at disability insurance and find out how to maximize your coverage for the greatest benefit. 

What is Short-term Disability Coverage? 

The main differences between these two types of insurance are how long you can receive benefits, and how long you have to wait to start receiving compensation. 

Short-term, as the name suggests, it temporary. It covers less serious injuries that may keep you away from work for a period of time, but are likely to recover from. 

Examples of injuries may include: 

  • A surgeon brakes their arm or hand 
  • A doctor needs to recover from back surgery 
  • A medical professional that needs to recover from cancer treatment 

Short-term benefits typically cover 60 percent of your income. The waiting period from the time of the claim until the first payment is usually two-weeks. Benefits will last around six months, though some can last up to two years. 

What is Long-term Disability Coverage? 

Long-term disability insurance protects individuals from injury or illness that keeps them out of work for an extended period of time. The waiting period to receive benefits is longer than short-term, at around 90 days. Long-term benefits last from five to ten years. Some plans will pay benefits until the policyholder reaches age 65. 

Because long-term policies can pay for decades in some cases, you must undergo a complete underwriting process that will assess your risk of filing a claim in the future, and how much that claim could possibly be. Insurers will also classify you by your medical specialty taking into account job hazards, and the difficulty of returning to your specific type of work following a disability. 

Combine Short-term + Long-term for Maximum Coverage 

Don’t skip getting a long-term policy just because you have short-term coverage. Short-term will not be adequate in the event you suffer a serious injury or illness. You also don’t just want to rely on group long-term coverage either. 

Group plans tend to have an annual renewal process. The risk for you is there is no guarantee your employer or insurance company will renew the policy. If you go on long-term disability while working for a company, then they let you go, you lose your long-term insurance benefits. 

The best strategy for doctors is to buy an individual long-term physician disability policy. Then, supplement it with your employer’s short-term and long-term group plans. By combining the two you get protection for your income against nearly any type of injury or illness that would affect your ability to earn income.  

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