Types of Disability Insurance Plans

• Workers can obtain two types of disability coverage: short-term and long-term. Short-term disability plans provide coverage for different lengths of time such as a couple of weeks up to a maximum of two years. Both policies have waiting periods that must pass before insurers pay out benefits. STD policies can have waiting periods that last as little as a couple of days, while insureds can get LTD benefits in less than 90 days.
  
  

What Does Disability Insurance Cover?

• Disability insurance plans cover a plethora of medical problems that keep insureds out of work for temporary periods of time as well as those that end their employment permanently. Some of the more common disabilities include back injuries, cancer treatments, diabetes, broken bones and arthritis. Women are also able to file for disability benefits when they are on maternity leave.
  
  

How Much of Wages Does Disability Insurance Cover?

• Disability insurance policies cover a percentage of the insureds' earnings. Policy benefits differ from insurer to insurer but generally they cover half of insureds' salaries, with some paying as high as 80 percent, according to McClaren & Associates. However, insurance companies will not pay 100 percent of the insured's total wages to provide encouragement for them to get back to work quicker.
  
  

Why Get Disability Insurance?

• Becoming disabled and being out of work for lengthy periods of time are not uncommon. One out of eight workers will experience a disability, making it more likely to happen than being involved in a serious auto accident -- one in 70, according to Insurance.com. The average length of long-term disabilities is 2.5 years, according to the Council of Disability Awareness. The CDA also reports that one out of every seven workers will experience a disability that last longer than five years.
  
  

Where Can I Get Disability Coverage?

• Disability coverage can be purchased as individual policies through insurance companies. Workers can also get disability insurance through their place of employment as well. In fact, only 50 percent of companies offer short-term coverage, while long-term insurance plans are sponsored by only 40 percent, according to Insurance.com. By purchasing individual disability policies with after-tax dollars, insureds will receive plan benefits tax-free. Those who get coverage through their employers will have their benefits taxed by the IRS because premiums are generally paid with pre-tax dollars.