Your ability to make a living in New Jersey and enjoy life is critical. If you were to be suddenly faced with a disability that prevents you from working for months or years, the business you spent years building, your savings or even your job will be at risk. Disability insurance can be one of the most important investments you can make.
Disability insurance explained
Most people think their health insurance will cover them if they become disabled, but that is not always the case. Health insurance generally only covers medical expenses related to an illness or injury and does not replace your lost income. On the contrary, disability insurance is designed to replace a portion of your lost wages from your inability to work as a consequence of the disability.
How to get it
The Employee Retirement Income Security Act (ERISA) requires certain employers to provide disability insurance for their employees. For example, industries like trucking and construction often have disability insurance as a requirement for their employees. If your job does not fall under ERISA, you can still get disability insurance through the open market.
What disability insurance covers
Disability insurance typically covers between 40% and 60% of your lost income, as well as the cost of any necessary rehabilitation or retraining. The policy will have a maximum monthly benefit that it will pay out as per the terms of the agreement.
Types of disability insurance
There are two types of disability insurance: short-term and long-term. Short-term policies generally cover disabilities that last for a few months, while long-term policies cover disabilities that last for several years or even indefinitely.
Disability insurance can cover various injuries and illnesses, from broken bones to cancer. However, it generally does not cover disabilities that are caused by pre-existing conditions. Regardless, it is still a good idea to have some form of disability insurance, as it can provide much-needed financial security if you are ever faced with a disability.
