Supplemental Disability Insurance
Supplemental Disability Insurance
Supplemental short term disability insurance closes the gaps left by many other types of income security plans you might already have. Your existing disability coverage may be limited in how quickly payments begin after you become unable to work, your percentage of income replacement, and your ability to qualify for coverage.Supplemental short term disability insurance plugs the gaps in:
If you are planning a pregnancy, increase your maternity pay and fill holes in existing coverage.
Augment State Temporary Programs
State disability insurance is wonderful - if you have it. Only five states provide coverage: California, Hawaii, New Jersey, New York, and Rhode Island. If you work in one of the 45 other state you have no state coverage.
State programs are limited. Each state varies, but they all have a percentage cap ranging from 50% of income replacement to 66%. Each state also has weekly limits ranging from $170 per week, to $946 per week. The benefit period ranges from 6 months to 12 months.
Supplemental short term disability insurance can cover what your state government program does not. It is available in all 50 states regardless of what is or is not mandated. You can increase your monthly entitlement to a full 66%, and lengthen the amount of time payments are made to as long as twenty four months.
Shorten Long Elimination Periods
Supplemental short term disability fills holes in the elimination period of long term policies. Long term policies protect your income up to age 65 should you become unable to work for medical reasons. Because the payment period is so long, the elimination period often times is also quite long in order to keep the premium more affordable.
Most disabling events are quite short. You are far more likely to miss 3 to 4 weeks of work, then you are to miss 3 to 4 years. If your long term policy has a 3 month elimination period, your 4 week impairment will not be covered.
A supplemental policy can fill the hole in your elimination period, and provide income protection for the more common, shorter interruptions in earnings.
Complete Individual Policies Sold Directly
The holy grail for many working women is an individual short term policy that replaces income during maternity leave for a normal pregnancy, and is sold directly. Their employer does not offer coverage that provides maternity leave pay. So they search the internet looking for something, but never find it.
Policies covering normal pregnancy are money losers for insurance carriers, as the women buying the policy plan to use the contract. This explains why there is such demand.
Supplemental policies are sold at work as a voluntary employee program. Employees pay the premium themselves, so it is easy for employers to make this option available to everyone. The group that gains most is working women with growing families as these policies cover normal pregnancy. They need the maternity leave income during recovery from normal childbirth, and the extra security in case complications interrupt earnings before delivery.
Adding to Coverage
I already had a policy. But the elimination period was very long, and it did not replace much of my income. I was planning a pregnancy and found a way to fill the gaps.
Ancillary Payments While Social Security Examines Your Claim
Social Security Disability Insurance (SSDI) is provided by the Federal Government, and funded by your payroll taxes. The SSDI program is intended for permanent impairments only.
It is very difficult to qualify for compensation, and you have a 6 month waiting period before payments begin. You must be unable to work for one year or longer, or if your impairment will result in death.
Supplemental short term disability insurance can provide coverage for temporary medical conditions and can cover the time before payments begin through Social Security.
Additional Features Augment Group Policies
Your employer may provide you with company paid disability entitlements, or you may pay into a group plan yourself at work. These programs are great to have, but they have one major weakness: if you leave your employer you lose your coverage.
What if you leave your employer and your health history makes it hard to get new coverage?
Supplemental coverage is portable. That means you can buy it while healthy through your employer, and if you leave you get to keep the policy - regardless of your health picture at the time.
Group disability plans also have benefit caps and/or defined elimination periods. Your level of coverage may not be adequate given your income, or the elimination period may be very long. If you go broke before payments begin, what value is that to you?
Supplemental disability insurance can increase your level of income replacement, and shorten your elimination period.
Auxiliary Coverage to Workers Compensation
Workers compensation insurance replaces a portion of your income associated with on the job accidents and illnesses. If you are injured on the job, your employer may place you on light duty in order to keep claims history in check. This means you may have to accept a significant cut in pay. If you are hurt off the job workers compensation will not make payments.
Supplemental short term disability insurance replaces a portion of your income for on the job accidents, and may provide compensation even if you are only partially impaired. Full payments are made for off the job medical events that prevent you from working.