What Is Long-Term Disability Insurance?
There are two types of disability insurance: long-term and short-term. As the names suggest, short-term disability will only cover you during short periods of time. Typically short-term insurance will cover you for around six months. Once your short-term disability is done, your long-term disability will take over from there. Depending on the type of policy that you have, your long-term disability should cover around 50-60% of what you would normally make. Your long-term disability policy will continue to pay you as long as your are disabled, or for the duration of time stated in your policy. You may or may not be responsible for paying taxes on the money that you are getting from your long-term insurance policy. If your long-term insurance policy is paid with your post-tax money, then the money you receive from your disability payments will be tax-free. However, if you or your employer pay for the policy with pre-tax money, then you will be responsible to pay taxes on the money that you receive. Having you return back to work in a timely fashion is in your insurance company’s best interest. The quicker you return to work, the more money they will save in the long run. Your insurance company will do their best to work with your employer to see you return back to work sooner rather than later. There is a possibility that you can be classified as partially disabled, depending on what your condition is. Being partially disabled means that you are still able to work, even at a diminished capacity of what you used to be able to do. In this case, you will still likely be earning less money than you were before. If this is the case and you are classified as partially disabled, then your long-term disability policy will pay out something to help supplement your income. However, if you are earning less than 20% of what you were before, then you will be paid the full amount by your long-term disability policy. However, if you are still earning between 20-80% of what you were earning before you were disabled, then you are entitled to receive a proportionate amount of income based on what your earning potential was. If you are earning 80% or more of your normal income, then your long-term disability insurance carrier will not consider you to be disabled and you will not receive any payments from them. Some insurance carriers will offer your reimbursement benefits for your dependents. This means that you may be eligible to receive reimbursement for paying for any child care expenses. If you start receiving long-term disability benefits from your insurance carrier, then you will not be responsible for paying the premium on the policy. Most policies have a clause stating that if you are on long-term disability for over 90 days, you will not be responsible to pay for the premium payments.
Purchasing an Individual Policy for Disability Insurance
Not all employers will offer benefits such as long-term disability insurance. If this is the case where you work, you are able to purchase your own individual policy for long-term disability insurance. You may want to speak with a financial planner, an insurance agent, or maybe even your mortgage company to be set up with a long-term disability policy that would work for you. Most long-term disability policies are considered to be “non-cancellable.” This type of non-cancellable insurance will require that you have a medical exam done before being approved for the policy. A non-cancellable policy also means that the insurance company is not allowed to raise your premiums or cancel your policy on you. Rates can be subjected to being raised though if you are in a group policy. If you find that you have any questions or discrepancies on your insurance premium contact your disability attorney for assistance.
Schedule an Appointment with Disability Attorneys in Augusta GA
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