It's hard to imagine when you are healthy and working, being disabled by injury or illness. But it does happen. It has been said that one in three working Americans will, at some point, be disabled for more than 90 days before they reach age 65. The chances are greater if you are of working age.
It is critical that you understand your income risk so you can be prepared for the potential financial impact of a disability the same way you would protect your home, car, and family health from unexpected loss.
What is Michigan Short-Term Disability?
Michigan Short-Term Disability covers an injury or illness that keeps a person from working for a short time. The definition of short-term disability (and the time period over which coverage extends) differs among insurance companies and employers. Michigan Short-Term disability Insurance coverage is designed to protect an individuals full or partial wages during a time of injury or illness (that is not work-related) that would prohibit the individual from working.
What is Michigan Long-Term Disability Insurance?
Michigan Long-Term Disability picks up where short-term disability leaves off. Once your short-term disability benefits expire (generally after three to six months), the long-term disability policy pays you a percentage of your salary, usually 50 to 60 percent, depending on your policy. You will then receive benefits for two to five years or until you turn 65.
Many people believe they are already covered through an employer. While this may be the case, in most instances, benefits only cover about 50% of your income. Can you and your family survive on half of your income?
Using personal savings is an option, but if you calculate your monthly bills and multiply by 12, you can see how quickly personal savings can be depleted.
Many people also think qualifying for disability payments through Social Security is automatic. With Social Security disability. you are limited to disabilities that are expected to last at least a year or end in death. You must not be able to engage in any type of work in order to qualify.
Some of the individual disability options available include:
Guaranteed Renewable Income Protection which is a policy guaranteed renewable to age 65. As long as the premiums are paid, the policy cannot be canceled.
Individual Non-Cancelable Income Protection which is also guaranteed renewable to age 65. It is non-cancelable, which means the premium can never change, they are guaranteed.
Being familiar with some of the terminology associated with Michigan Disability Insurance can help a great deal in your decision making.
Terms such as:
Benefit Period - This is the maximum length of time you will receive payment from the insurance company for each period of disability. For example: choose a six month, one, two, five, or ten year, or to age 65 benefit.
Elimination Period - This is the amount of time between the start of your disability and the date you qualify to begin receiving benefits. For example: you may have a choice of 30, 60, 90, or 180 days, or a one or two year elimination period.
Survivor Benefit - A monthly benefit to the spouse or estate in the event of death during a period of total disability. For example: a spouse/estate could receive four times the monthly benefit in the event of death during a period of total disability.
Retroactive Waiver of Premium- With this benefit, future premiums are waived, and reimbursement is paid after 90 days of total disability.
Guaranteed Insurability Rider - This rider would provide you with additional coverage as your income increases without having to go through medical underwriting.
Retroactive Injury Benefit- this option pays you from the first day of total disability.
Activities of Daily Living Rider - This rider provides you with additional coverage if you are unable to perform certain daily activities.
Cost of Living Adjustment Rider - this helps guard you against potential inflation.
Disability Insurance options and features may vary by state and occupation class.
So, if you do have disability insurance through your employer, you need to find out the details of the coverage in order to make sure you have enough to cover your monthly bills. If you are self-employed you will also want to make sure you have the right amount of income needed if you become disabled.
To help you find out how much coverage you need and/or to request a quote for Michigan Disability Insurance, please contact Golm Insurance Agency by going to our contact us page.