Length of Coverage

The length of coverage for disability insurance is the length of time that you receive disability benefits from your insurance provider. If your policy pays your benefits monthly, the length of coverage will be the number of months that your policy is active for. If your policy sends you weekly benefits, then the length of coverage is the number of weeks that you receive the benefits for.

When looking for disability insurance, there are two main types that you need to consider. There is short-term disability insurance and there is long-term disability insurance. You can buy these disabilities as part of a group through an employer or you can buy it individually.

Short-Term Disability Coverage
Short-term disability insurance is an important piece of your overall insurance plan. Short-term disability will pay you a percentage of your work-related income, usually 50%, 60%, or 66 2/3%, if you become temporarily disabled. The insurance company will not include the money that your spouse makes, your assets, or any non-work-related funds that you may receive when they pay you a portion of your income. Most short-term disability policies have a maximum amount of money that you can be paid each month.

A temporary disability means that you will not be able to work for a short period of time due to a sickness or an injury. Common causes of short-term disability claims include pregnancy, back injuries, and digestive or intestinal issues. Work-related injuries don't count because those are covered by workers' compensation insurance. Your length of coverage will typically last from 13 to 26 weeks.

With a short-term disability policy, you generally can start receiving money within 1 to 14 days after your become disabled. Depending on whether you suffer an illness or injury determines exactly when coverage starts. If you suffer an injury, benefits will begin usually right away. However, if you suffer a sickness, benefits usually take longer to kick in because enough time needs to have lapsed to show that the sickness will be a disabling one.

Long-Term Disability Coverage
When looking for a long-term disability insurance, you want to find a policy that will provide coverage for three basics periods of time: one year, two years, five years, or until you turn 65 years old (which is typically when you will retire). Remember that the longer you receive the payment benefits, the higher your premiums will be.

Because disability benefits are meant to replace the income that you would have earned had to been able to work, you do not need benefits that extend beyond the years which you would have originally worked. If you decide to have a short benefit period rather than a longer one, you will save lots of money on premiums. Remember, though, that if you need this insurance at all, you probably are needing it to cover a disability that keeps you out of the workforce permanently. And a lengthy disability is a threat to your financial health much more than a short-term disability is.

Long-term disability picks up where your short-term disability benefits leave off. The length of coverage for short-term disability is usually within 3 to 6 months. The long-term disability policy will also pay you a portion of your salary, usually 50%, 60%, or 66 2/3%. Once you become disabled and begin collecting the benefits of your insurance policy, you no longer have to pay the premiums.

Individual vs. Group Disability Coverage
Generally, you can buy long-term individual policies the same length of coverage that you can buy for long-term group policies: one year, two years, five years, or until you turn 65.

If you purchase disability insurance individually rather than as part of a group, you will pay higher premiums. Also, most policies are non-cancelable. An insurer can raise the premiums rates for a group, but not usually for an individual.