Disability Insurance and Pre-Existing Conditions: What's Covered and What's Not

 

Introduction:

Disability insurance is a form of health insurance that covers you and your dependents in the event that you become disabled through illness or injury. Pre-existing conditions are illnesses acquired before the application date of a particular policy. They have no bearing whatsoever on the coverage of pre-existing conditions in these types of policies.

Disability insurance, in one form or another, has been around since the founding of the country. The first person to suffer a disability was Columbus after a ship struck a reef while he was exploring the coast of Cuba. If you're unfamiliar with your neighbor's hobbies or hobbies out of their comfort zone, it's time to change and get yourself some disability coverage.

What's Covered and What's Not

Disability insurance and pre-existing conditions are frequently misunderstood topics. Here's what you need to know:

What's Covered?

The most common benefit in disability insurance is medical, but it's not the only one. It also covers loss of income, funeral expenses, and other expenses associated with a disability. These benefits are usually paid by your employer's plan or through self-funded plans like 401(k)s and IRAs.

How Much Does It Cost?

The cost of disability insurance depends on how much coverage you want and how much you're willing to pay for it. The average monthly premium for a family policy is $1,250-$1,500 per month. If you want to purchase individual coverage, expect to pay an average of $400-$500 per month.

Who Does It Cover?

The number of factors determines who is covered under your policy. You can ask your agent or insurer if they offer any discounts based on age or gender. Some policies exclude active military members from their plans due to restrictions on what benefits they receive while serving overseas, so check with your agent or company before purchasing any form of coverage.

Making Sense of the Details

There are two different types of disability insurance: short-term and long-term. Short-term disability coverage covers you for up to a year, while long-term disability coverage covers you for more than a year.

The coverage is different but the requirements are similar. In both cases, you must be disabled and unable to work due to an injury or illness. The difference is that in short-term disability, you must have been disabled for up to one year before becoming eligible for any benefits; in long-term disability, you can become eligible for benefits after being disabled for up to five years.

In most states, there isn't much difference between the two kinds of insurance policies — they're almost identical except for the amount of time they cover and whether they're temporary or permanent. The exceptions are California, which requires all policies to provide coverage for at least three months after an injury or illness starts, and Florida, which requires all policies to provide coverage for at least 365 days after an injury or illness starts.

Conclusion:

By obtaining disability insurance, you are safeguarding your ability to support yourself and your family if the unfortunate event of being unable to physically work occurs. While it is important to shop around for disability insurance and get quotes from different providers, we highly recommend purchasing some form of disability insurance before you are hurt or become sick with a pre-existing condition.

I'm not saying that disability insurance is a panacea or cure-all. It's not. It won't solve all of your problems, it won't even fix all that's wrong with the insurance system today. However, I do believe that it's a beneficial tool to have in your arsenal and one that you should take a look at if you're currently without any form of disability insurance coverage.