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Who will pay the bills when you are too sick or injured to work?
Disability insurance is one of the least understood types of insurance, but also one of the most important. Many people mistakenly believe that workers who become disabled will receive disability income either through Social Security, Worker's Compensation or both. But Social Security disability benefits are often quite restrictive and employees don't qualify for Worker's Compensation unless the disabling illness or injury happened on the job. |
Employer-sponsored disability income insurance is much less restrictive and falls into two main categories.
- Short-term disability income insurance plans usually offer benefits that are paid for a maximum of 26 weeks.
- Long-term disability benefits generally continue for the length of the disability or until retirement age.
Cost can be affected by adjusting the maximum monthly benefit, benefit periods and waiting periods before benefits begin. This is another area where it's possible to allow employees to purchase additional coverage either by purchasing increased benefits under the group program or through a voluntary benefit program. |
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How would you like to receive an extra paycheck? I'm affiliated with the LIFE Foundation, a nonprofit insurance education group that is sponsoring the "Where Did My Paycheck Go?" challenge during the month of May. Entering this contest is simple: You will be asked to take a minute to think about your paycheck and where all your hard-earned money goes. One lucky entrant will be chosen at random to win a "bonus paycheck" in the form of a $1,000 American Express gift certificate.
Why all the attention on your paycheck? Well, many people don't realize that just as they protect their cars and their homes with insurance, they need to be insuring another valuable asset-their paycheck. That's where disability insurance comes in: Think of it as insurance for your paycheck. It ensures that if you are unable to work because of illness or injury, you will continue to receive an income, enabling you to make ends meet until you're able to return to work.
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