Disability Insurance plans provide periodic payments of benefits when an employee is unable to work because of a sickness or accident. Employers can choose coverage options that vary between 40% and 70% of an employee’s income. Many consumers do not plan for the possibility that they will be faced with a debilitating accident or illness during their working years. If an employee becomes sick or injured and unable to work, will they be able to pay their bills and maintain their standard of living? If the employee depends on their income to pay their bills, they may need to seriously consider buying disability income insurance.
There are 2 major types of policies, short and long term. Short term policies generally start paying benefits after 1 to 3 weeks and pay benefits for 13 to 26 weeks while long term policies start usually after 90 days of disability and pay benefits for 2 year or until age 65. The variety of waiting periods, benefit periods and riders are significant and insurance brokers are ideally trained to build a package that suits the individual needs of each company.