Disability Insurance 101

Short-term and long-term disability insurance provides monthly benefits when you cannot work due to an illness, injury, or chronic health condition. Roughly one-third of Americans have some form of disability insurance, either as an employee benefit or through a private policy, according to the U.S. Bureau of Labor Statistics.

Because these policies are typically funded by for-profit insurance companies, their terms and conditions vary. As you start your disability insurance journey, you must review and understand your policy’s precise language. Otherwise, you might make mistakes that reduce or eliminate your monthly benefits.

To understand your policy’s requirements, you should review one of two documents: 

• Plan Document or  Policy:  discusses all the terms and conditions of your coverage in detail. This document may be hard to read, but it is an authoritative source and will govern the requirements for benefits as well as what benefits you may be entitled to. 
• Summary Plan Description:  outlines your policy’s most important rules and requirements, like how it defines disability, its filing deadlines, and any limitations it places on benefits. While easier to read, it will not provide as much detail as the Plan Document. 

As you review your policy’s language, consider  the following issues:

• Whether you are disabled under your plan
• How much you will get in benefits 
• What laws apply to your claim