Disability insurance is designed to help employees who can no longer work because of a severe injury or illness. Even though there are many federal and state organizations that assist disabled employees, those programs aren’t always enough. A disability policy will cover a variety of future expenses including physical therapy, medications, and surgery. Here is a closer look at how these policies work and who should consider this type of coverage.
The Basics of Disability Coverage
There two different types of disability insurance and the only difference between them is how long the coverage is going to last. A short-term policy typically covers some or all of an employee’s expenses for around six months. Long-term policies, on the other hand, can last for years or the rest of an individual’s life. Those who have long-term policies might have to give their insurance provider documentation once every few months showing that their condition has not improved.
Noncancelable and Guaranteed Renewal Policies
Just like many other types of insurance, you will need to review and renew your company’s disability policies at designated intervals. Most insurance providers ask their policyholders to review their coverage at least once every year. Those who have a noncancelable policy can renew their insurance without any changes to their premiums or coverage. With a guaranteed renewal policy, the insurance provider can make changes to the premiums as long as those changes are equally applied to all policyholders in the same rating class.
Additional Coverage and Riders
If you aren’t interested in full coverage or simply want to supplement your employees’ current coverage, then you might want to consider a residual or partial disability rider. These riders allow policyholders to return back to work as part-time employees without completely revoking their coverage. This type of supplemental insurance covers some of an individual’s expenses as long as they are able to work at least a few hours every week. Some of these riders also take other forms of compensation into consideration such as health insurance and disability benefits from the Social Security Administration.