Monday, December 24, 2007 11:32 AM
What's disability insurance?
You know that quacking duck? The Aflac mascot, ubiquitous on TV, is an advertisement for a certain type of disability insurance known as short-term disability. If you have a policy for this, you pay a monthly premium and are covered in case you are injured and cannot work. There is also long-term disability, which covers you for longer periods of time. And finally, there is long-term care insurance, which is for nursing home or full-time at-home care.
Many employers offer a basic version of these plans as part of a benefits package, especially short-term disability, which may be used for maternity leave as well as injuries. In some states, employers are actually required to provide this up to 26 weeks. But you may have to pay extra if you want additional coverage. Some plans will only cover you if you can’t do any work at all – but if you can earn minimum wage flipping burgers, you can’t cash in. Look into what your plan covers, and if shopping around, you should look for a plan that covers 60 to 70% of your income, has cost-of-living increases and has a liberal definition of disability.