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Short-Term Disability Insurance For Individuals
Author: Michael Relvas
Although Long-Term Disability insurance is the most inquired about form of Disability insurance, we receive many inquiries regarding Short-Term Disability as well. There are two common reasons that individuals will inquire about Short-Term Disability insurance. In most cases it will be a female that is planning on starting a family and would like insurance to cover medical leave during and around the time of birth. All other cases will be people who are not offered disability insurance through their employer and would like to carry some level of personal coverage.
If you are in the first group described above, you should know that there is no Disability insurance company in today's marketplace offering individual coverage that pays benefits for normal pregnancy. Complications may be covered depending on the duration of the condition and the provisions of your Disability policy, but not normal pregnancy. The only way to obtain coverage for normal pregnancy is through a group Short-Term Disability plan, which must be provided by an employer. The coverage does not necessarily have to be funded by the employer, but must be established by them. Additionally, group insurance policies will exclude pregnancies that occur within the first 9-12 months after a participant's effective date. This is done specifically to protect insurance companies from adverse selection, which is when a person elects insurance because they know they will use it.
If you are considering Disability insurance for the simple reason that it is not offered at work, than you need to know about the different options available on an individual basis. First of all, the number of companies offering Short-Term Disability coverage for individuals is very limited and not usually very well priced. Partially for this reason there are not many insurance agents that work with Short-Term Disability insurance or are aware of the options available.
There is only one company I know of offering a traditional Short-Term disability policy for individuals. This type of coverage has a 7-14 day waiting period and a 3-6 month benefit period. For someone who has Long-Term Disability already, this design may work well and can provide benefits during the 90-day or 180-day elimination period of the Long-Term contract. For someone who does not have Long-Term coverage however, this may not be the best option. Disability insurance that provides a benefit period of 3-6 months simply does not provide sufficient protection.
There are a few highly rated insurance companies that allow you to design a Long-Term Disability policy using a 30-day or 60-day elimination period and benefit periods of 1,2 and 5-years. For someone looking into Short-Term Disability this is a great option to consider. For the same premium required with a policy designed with a 14-day elimination period and 6-month benefit period, you could obtain a shortened Long-Term Disability policy designed with a 30-day elimination period and 1-year benefit period or 60-day elimination period and 2 or 5-year benefit period. The benefit potential is much greater and the premiums can be practically identical.
Before rushing into a policy that does not properly protect you or simply giving up on Disability coverage because of the high costs, you should speak with someone regarding these types of options. Disability insurance is one of the most important types of insurance coverage a person can have. It protects your ability to earn an income, maintain the lifestyle you have today and quite simply, live life without being a burden to someone else. Everyone should have some level of Disability coverage and this type of policy structure can at least help provide some layer of coverage.
Michael Relvas is an insurance specialist and also the owner of MR Insurance Consultants, a web-based insurance firm specializing in Life and Disability insurance. Michael provides interested consumers with personalized information, quotes and advice regarding Disability insurance by means of telephone and electronic communications. If you'd like to review options relating to Disability insurance for your occupation and circumstances, you can call 1-800-817-4522 or email Michael@MRInsuranceConsultants.com.
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