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Disability insurance is designed to protect your paycheck if you can’t work due to an illness or injury — but it isn’t a catch-all policy. Your insurer will only pay benefits if your condition is specified in your policy, and the list of conditions differs between short-term, long-term and Social Security disability.
Short-term disability (STD) insurance protects your paycheck when you can’t work for a short period of time — typically three, six or 12 months.
Since it caters to short-term needs, STD tends to cover temporary disabilities and conditions with a relatively quick recovery time. These include:
You may not think of pregnancy as a disability, but many insurers classify it as one under their STD policies.
If you purchased a policy before you became pregnant, you may be eligible to receive benefits for six weeks after a vaginal delivery and eight weeks after a C-section. If you have a high-risk pregnancy or experience complications, hypertension or postpartum depression after childbirth, your disability benefits might be payable for longer.
Insurers treat pregnancies differently, so check the parameters of your policy before filing a claim.
Disability insurance and pregnancy
Depending on the benefit period you choose, long-term disability (LTD) replaces a portion of your paycheck for two, five or 10 years, or until you reach retirement age.
This policy typically pays out for severe or lifelong injuries and illnesses. Your insurer may cover:
To qualify for Social Security Disability Insurance (SSDI), you’ll need to prove you’ve worked in jobs covered by Social Security for a certain number of years, and meet the Social Security Administration’s definition of disability.
Your condition must significantly impact your ability to work for at least 12 months.
The Social Security Administration manual that lists a number of physical and mental impairments that qualify for SSDI and Social Security Income (SSI).
Known as the “blue book,” the 2020 version includes these conditions:
Most likely — but your preexisting condition may not be covered under your policy.
Most insurance companies will happily offer you a policy, but exclude your condition from coverage for a set period of time. This means that if you become disabled and your disability is linked to a preexisting condition within the specified time frame, your insurer will deny the claim. However, it will pay benefits for a disability that isn’t directly tied to your preexisting condition.
Let’s say you’ve had heart surgery in the past. If you suffer a heart attack or stroke shortly after starting your policy, your disability insurance probably won’t pay out. But if you suffer an unrelated disability — like back pain — you should be eligible for benefits.
Some disability insurers are stricter than others, and will reject your application altogether, which is why it’s worth comparing policies from a handful of companies.
Disability insurance and preexisting conditions
No. Disability insurance rates are primarily based on your age, health and occupation, as well as your chosen benefit and elimination period.
Yes. You can qualify for SSDI and private disability insurance benefits at the same time, and for the same disability.
But you won’t necessarily receive the full benefit from both policies. If you’re eligible for SSDI, your insurance company may deduct your SSDI payments from your private benefits. So if you qualify for a $2,000 monthly benefit from your long-term disability insurance policy but also qualify for $500 from SSDI, your LTD policy may only pay $1,500 a month.
The same goes for workers compensation and military benefits for veterans. You can qualify for these programs while receiving SSDI and private disability benefits.
Every disability policy has a list of exclusions — injuries and illnesses that don’t qualify for coverage.
They vary between insurers, but these are the most common limitations:
Yes — most policies will cover you if you contract coronavirus and can’t work. But if you got COVID-19 before you applied for disability insurance, your insurer may consider it a preexisting condition and deny the claim.
Along with your insurer’s definition of disability, the terms of your policy can also affect your coverage for certain conditions.
When you’re shopping around for a policy, take note of these terms.
Your disability insurance plan will fall into one of two categories:
Your disability insurance policy will either provide off-the-job coverage or 24-hour coverage.
A 24-hour policy covers you around the clock, while off-the-job coverage comes into play if you suffer a disability when you aren’t working. It’s designed to compliment worker’s compensation.
Your disability insurance will only cover conditions that are listed under your policy. Each insurer has its own definition of disability — but STD policies typically pay out for conditions with a shorter duration or recovery time, while LTD covers long-term disabilities.
To get the most comprehensive coverage for your needs, compare disability insurance companies.
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