Disability Insurance

When Are You Considered Disabled?
The definition of disability can vary depending on the policy you have. For example, some plans pay when you're unable to engage in your own occupation while others pay when you're unable to engage in any occupation for which you're reasonably suited based on your training or experience. It's common to use an own-occupation definition for two years, three years or even longer, with an any-occupation definition thereafter. Many disability plans require that you not be gainfully employed while you're collecting benefits.  In addition, some policies will pay you a portion of your monthly benefit if you have lost a part of your income due to a disability. (This is usually referred to as a residual or loss of earnings benefit.) Some policies include a rehabilitation benefit that pays some or all of the cost of a course of occupational rehabilitation approved by the insurer. Keep in mind that many policies will not cover disabilities caused by suicide attempts, drug abuse, war, or attempts to commit a crime. Pre-existing conditions are also frequently excluded.

When Will Benefits Start Accumulating?
Most long term disability plans have a waiting period before benefits begin accumulating. The most common waiting period is 90 days. However, you usually can get as low as a 60-day waiting period, as well as 180-, 365- and 730-day waiting periods. The length of your waiting period should be determined by asking yourself, 'How long can I go without a paycheck?' The longer the waiting period, the lower the premium.

How Long Will Benefits Be Paid?
In most disability income plans, you can elect the maximum time your benefits will be paid. The most frequently offered benefit periods are two years, five years and to age 65.