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Disability Insurance Policies

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Disability insurance is a special type of insurance that many employers offer their full-time employees. They may offer the insurance to part-time employees, as well. The insurance usually comes attached to a benefit package that workers have access to approximately 30 to 90 days after they assume a position with the employer. The insurance protects a percentage of their wages if they fall ill during their course of employment. Employers usually offer separate health policies that cover their workers' medical expenses. The employees only have to pay a portion of the monthly premium for the health insurance policies.

How Disability Insurance Works

Each worker who has a disability plan will have to pay a certain percentage of the monthly premium that the provider charges. The employer will pay part of the monthly premium, and it will deduct the remaining amount from the employee’s paycheck. The plan will cover physical and mental illnesses. Examples of some illnesses that the policy may cover are heart disease, depression, diabetes and bone fractures. The employee must seek medical attention as soon as he or she falls ill. The person must contact the insurance company, as well. The insurance company will request documentation of the employee’s illness. If the documentation meets the insurance company’s requirements, then the insurance company will pay the employee a portion of his or her wages until that person recovers.

The amount of pay an employee receives from a disability policy depends on the insurance company. Payments can vary from 60 percent to 100 percent, and they can decrease over time.

Types of Disability Coverage

Long-term and short-term are the two main types of disability coverage that exist. Short-term disability usually applies to any illness that lasts less than one year. Sometimes short-term disability ends after six months. Once the short-term period ends, then the employee would have to apply for long-term assistance. Long-term disability benefits generally last around two years, but some policies may continue to pay an employee for up to five years or longer. The length of disability benefits depend on the provider’s terms.

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