Disability Insurance, Life Insurance Differences
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Disability Insurance, Life Insurance Differences
All the different types of insurances can cause confusion. There are vast differences between Disability Insurance and Life Insurance.
Disability Insurance:
Private Disability Insurance is a financial tool that functions to replacement for of your income if you were to become disabled. The result of begin disability can cause more financial hardship to your family than your death.
You will still have living expenses and often enormous medical bills but you will not be able to work. Private Disability Insurance is a financial tool that functions to replacement for of your income if you were to become disabled.
- There is usually a waiting period before you can receive Disability Insurance Benefits. This means you have to wait a set amount of time after the disability.
- Disability Insurance generally provide you with a monthly payment and does not cover specific expenses.
- Disability Insurance payments continue for the duration of your disability or until the stated time limit on the policy has expired.
- If you purchase Disability Insurance through a Group Disability Insurance Plan at your work and your premiums are deducted from your paycheck and your Disability Insurance Benefits are taxable.
If you are able to receive Social Security Disability Insurance your monthly disability benefits is based on your lifetime average earnings covered by Social Security. The Social Security Administration has an extreme definition they use to define if you are eligible for Social Security Disability Insurance:
The definition of disability under Social Security is different from other programs. Social Security pays only for total disability. No benefits are payable for partial disability or for short-term disability. “Disability” under Social Security is based on your inability to work. We consider you disabled under Social Security rules if:
- You cannot do work that you did before;
- We decide that you cannot adjust to other work because of your medical condition(s); and
- Your disability has lasted or is expected to last for at least one year or to result in death.
This is a strict definition of disability. Social Security program rules assume that working families have access to other resources to provide support during periods of short-term disabilities, including workers’ compensation, insurance, savings and investments. 1. According to The Social Security Administration in 2014, it states that 1 out of 4 workers over the age of 20 years will become disabled for some period of time before they retire.2. Surprising, only a small percentage of disabilities are the result of an accident. A large majority of disabilities are caused by numerous illnesses. 1. Definition used by The Social Security Administration to determine if you are disabled. 2. Social Security Administration states 1 in 4 workers over the age of 20 years will become disabled for over 90 days.