Disability Insurance

Disability insurance is intended to replace income lost as a result of an illness or accident that is not excluded by the terms of the policy. Stated otherwise, it provides a source of replacement income, for a stated period of time, when the insured is unable to work because of an illness or an accident if that illness or accident is not excluded from the scope of coverage.

Disability insurance is medically underwritten, meaning that the insurer takes into account when considering the application the health condition of the applicant, including preexisting conditions.

One applies for a stated monthly benefit and the premium is based, in part, on that amount. Disability policies also have "elimination periods", which are similar to "deductibles" on property and casualty policies. An elimination period is the period during which no benefits are payable following a qualifying disability. A longer elimination period will generally correlate to a lower monthly premium, because the insurer's obligation to pay will not be triggered until after the elimination period has passed.

The definition of "disability" contained in the policy is also significant. In an "any occupation" policy, the insured must generally be unable to perform any work for which he/she is suited by experience or education in order to collect. In an "own occupation" policy, the insured must be unable to perform the material duties of the position that he/she had at the time of the qualifying disability.

"Any occupation" policies are generally less costly than "own occupation policies". Disability coverage can be had in the form of a group policy (such as, through employment), or as an individual policy. There are also "short-term" versions of disability coverage which pay for a maximum of, for example, 90-120 days, and "long-term" policies which can, all other things being equal, pay until retirement age.

The state plan replaces 50% of your income, or $170 per week - whichever is less. Benefits last for up to six months.

NJ has a state mandated temporary disability program for people who work in the state. You will need to complete a claim form.

Income from rental properties typically does not count as earned income when filing a claim on disability insurance. Disability insurance usually considers earned income from employment, such as wages or salaries, rather than passive income sources like rental income. However, specific policies may have different definitions of income, so it's essential to review the terms of your particular policy or consult with an insurance professional for clarity.

In general, yes.

In fact, because insurance is as closely regulated by the states as it is, insurers are often called upon (or perhaps pressured) to reopen or to reconsider claims when complaints are made by consumers to consumer affairs departments of state insurance regulatory authority. That is not to say, though, that every claim that is reopened will end up with a different result.

The party seeking to reopen a claim (usually an insured or claimant) will normally have to present new or overlooked evidence or documentation that supports the claim. State insurance statutes generally mandate that insurers have appeals processes for denied claims, and that the insured be apprised of the steps that have to be taken to initiate and to pursue an appeal. Such an appeal is a sort of reopening of a claim.

Disability income can be paid by a private insurance company that is licensed and authorized to issue disability income policies in the state of policy issuance. The policy can provide short-term or long-term benefits, depending upon its terms. It is designed to replace income lost due to a disabling sickness or accident specified in the policy.

Often, short-term disability insurance is furnished as a benefit of employment by employers for eligible employees. In those cases, the employer may either have purchased a group short-term disability policy, or self-insure for the payment of short-term disability benefits.

In general, if one purchases private disability coverage and him/herself pays the premiums for it, the benefits that are paid are not taxable.

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You qualify for disability benefits by being disabled as defined by the insurance policy. Secretly using illegal drugs is illegal, but not disqualifying. You certainly cannot claim to be disabled ONLY by illegally using drugs - the insurer owes you noting.

The elimination period is the length of time you must be disabled before benefits begin. Your elimination period is determined by you at time of application. Shorter elimination periods come with higher premiums.

An insurance policy does not "explain" anything as such. Instead, it is a contract by which the insurance company assumes the financial risk of loss for certain occurrences from the insured in return for the payment of a premium.

Part of the contract defines the scope of the risks that that the insurer is assuming; other parts define certain terms used in the insurance policy, and still other parts define what must occur or be done to trigger coverage. To that extent, the insurance policy is providing an explanation of its terms and conditions.

The SSA does NOT have any set amounts for this purpose.

You will have to get the correct numbers that you might be qualified to receive depending on your work record by going to the SSA website and at the top of the page choose DISABILITY

The answer depends upon several factors, and the payer may be a public or a private source.

On the public side, one may qualify for Social Security Disability Income benefits. Qualification depends upon meeting certain guidelines, including having paid into the system (through taxes) for a given number of "quarters". It also depends upon a determination by Social Security that the applicant is unable to perform any work. The amount received depends upon earning history and, to a degree, family size, in that a minor child may receive a benefit via the disabled party's grant of benefits.

On the private side, one may have purchased a disability insurance policy from an insurance company. Assuming that premiums were paid and a disabling event occurs, the insurer would be responsible for payments. The nature and extent of a disability that triggers an entitlement to benefits will be outlined in the policy. The length of time that the disability payments are made, and any waiting period before payments start are variable defined by the policy and which the insured selects when buying the policy. Both of those selections have a bearing upon the monthly premium.

No there is no state disability in Arkansas. You will need to buy a private policy.

The difference between SSI benefits and disability benefits has to do with the circumstances under which each is given. SSI (Supplemental Security Income) is provided only to those 65 years and over while disability maybe be provided at any age.

Most Individual Disability policies have waiver of premium once you qualify for disability benefits built into the policies. If the premiums for the policy were not deducted as a business expense then the income from the disability policy should be received tax free. If you have a group disability plan paid for by your employer then the benefits are usually taxable. In most cases you cannot purchase more than 70% of your income, in total, either in a group policy or in an individual policy or in a combination of both. The insurance companies have a schedule as to how much coverage you can buy based on your total earned income. The percentage goes down dramatically as your income increase. At $100,000 of income the total disability coverage you can purchase from all sources is around 55% of your income and for most people the maximum benefit available is around $15,000 a month and they would have to be earning over $400,000 a year to qualify for that amount of coverage. Unearned income, such as investment income, can also reduce the amount of coverage you can qualify for. I have heard it said that 1/2 the divorces in the USA are caused due to one of the spouses becoming disabled. When one loses their ability to provide for themselves through no fault of their own their personalities change and if they didn't have a quality disability program in place to help compensate they also can have major financial issues to deal with as well. That is not conducive to a happy lifestyle.

Disability insurance is mandatory in five states: California, Hawaii, New Jersey, New York, and Rhode Island.

This will be dependent on the coverage that your are offered and have been paying for at work. Some companies allow for individuals to continue coverage on an individual basis and others do not. The best way to find out is simply to call your specific insurance company and ask.

If you are in good health, you may want to look into what is offered on the individual market as well. Group coverage is great for those who cannot qualify for individual coverage, but the benefits it provides are lacking in comparison. If you are able to qualify for individual coverage, even though it may cost more, it may be the best option.

Taxation of disability benefits from a private disability insurance policy are based on whether the premiums are being expensed or not. Assuming that the premiums are not expensed and you are paying with after-tax dollars, your benefits will not be taxable.

The insurance carrier will issue a 1099 with your disability income if it is subject to taxation. The benefit is taxed if you paid the premium pre-tax, or if your employer funded a portion of the premium.

yes wife can sue her husband

Yes - keep both coverages. They are designed for two very different purposes. Your medical insurance reimburses the doctors and hospitals that provide your medical treatments. Disability insurance replaces a portion of your income during the time you are sick or hurt and unable to work.

Disability has nothing to do with your life insurance. These are two different things.

If I collected Disability payments in 2013 - on what line (or are they exempt) do they appear as income - Are they considered wages?