Suppose, if you will, that you’ve been injured in a serious accident. Surgeries are required, along with extensive treatments and months or even years of recovery. You may have a small reserve tucked away that will sustain you for a couple of weeks or months, but what then? Unable to return to work, you could face mounting bills and tremendous financial burdens. Your biggest asset is not your home or current investments, but rather your ability to go to work and garner a suitable income. When that is taken away, you have very few options. However, if you have an adequate disability insurance policy, many of those financial burdens could be eliminated.
There are a lot of misconceptions surrounding disability insurance, leaving many people unknowingly at risk. Disability insurance is private insurance, most often obtained through an employer or individually, that pays lost wages as a result of a non-work related illness or injury. It is not to be confused with Workers Compensation Insurance or Social Security Disability Insurance. There are two types of disability insurance: short term and long term. Short term disability (STD) benefits are intended to offset lost wages for a short period of time. After the designated waiting period, typically about five to eight days from the date of injury or illness, your short term benefits will extend for a period of time that is less than one year. Generally, STD benefits will cover up to 80% of your normal income. Long term disability (LTD) benefits are intended to cover longer periods of disability. The specific coverage details will be dictated by your individual policy, but most LTD plans have a waiting period of at least 90 days and only cover up to 60% of your usual income. They are meant to be used after your accrued sick time and short term disability benefits have been exhausted.
Although many Wisconsin employers do provide some form of disability insurance to their workers as part of a benefits package, it is not required by state or federal law. In addition, while you may qualify for benefits under your employer’s group disability policy, you’re benefits may be insufficient to adequately sustain your current lifestyle. Under such circumstances, you may wish to consider a supplemental policy that covers beyond what your employer offers. Much like other forms of insurance, disability insurance benefits vary between plans so it is critical to understand what your individual policy offers in cases of injury or illness. For example, some long term disability plans will afford coverage for a set number of years, like five or ten, while others will guarantee coverage until the age of 65 or later. Additionally, some policies will provide benefits if you are unable to engage in the occupation for which you have been trained, while others restrict benefits to those unable to work at all. To illustrate the importance of having sufficient disability insurance to suit your individual needs, consider the following scenario. A surgeon who sustains a hand injury may be unable to perform surgeries but may be qualified for employment at his or her local supermarket. Because the surgeon is not deemed totally disabled, he or she could be denied long term disability benefits if the plan restricts coverage to total disability.
Even if you are eligible to receive Social Security Disability Benefits, it can take a great deal of time to file and process all of the forms required through the application process. If your application is initially denied, an appeal can take years to complete. Both short and long term disability benefits help to offset the financial burden while you heal or await the instatement of more permanent disability benefits.
Because disability benefits can be confusing and vary greatly between policies, it is recommended that you consult with a qualified insurance agent in order to select the policy that best meets your individual needs and budget. If you have a claim for benefits you believe has been wrongfully denied, contact Doar, Drill & Skow, S.C. Our experienced attorneys offer free consultations and will thoroughly review your case to see if we can help.