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Frequently Asked Questions About Disability Insurance |
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| Q) | Do I need disability insurance? |
| A) |
According to the U.S. Census Bureau, you have a 1 in 5 chance of becoming disabled.
If you lost your source of income, how long would it take to deplete your savings?
Could you pay your mortgage and the rest of your day-to-day living expenses for
a month? Two months? More than two months? Statistically, you are more likely to
experience a disability of at least 90 days during your working years than you are
to die. Government sources give disability as the number one reason for foreclosures.
Your ability to earn a living is your most important financial asset and disability
insurance replaces a portion of your lost income while you are disabled and unable
to work.
Many people assume that they will automatically be eligible for Social Security Disability Insurance if they become disabled but Social Security benefits are not available until you have been disabled for 5 months and then only if you expect your disability to continue for at least 12 months. Claim processing can take up to three months and the standard to qualify is more stringent than most private disability plans. Even a short term disability can be financially devastating. Disability insurance is an important component of your financial plan. |
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| Q) | Can I apply for individual disability insurance through TruAssure? |
| A) | Unfortunately, TruAssure only offers group insurance coverage through your employer or some other qualified organization. If your employer does not offer TruAssure disability insurance at this time, ask your Human Resources department to contact us at 1-800-414-4988 and we will be happy to provide them with information on TruAssure’s products. |
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| Q) | My employer offers TruAssure disability insurance coverage. Should I purchase disability insurance through my employer or find my own policy? |
| A) |
There are two general types of disability insurance: Short term disability insurance
provides a portion of your weekly income for a short disability or for the first
part of a long disability and long term disability insurance provides a monthly
benefit based on a portion of your earnings for a more extended disability, typically
for several years or until retirement. Your employer may offer one or both options.
Because it is offered at group rates, the disability insurance offered through your employer is usually less expensive than what you could purchase individually. In addition, group insurance is available under most plans without having to prove that you are healthy as long as you enroll when you are first eligible. Individual short term disability policies are not as common as other types of insurance and employer-sponsored plans are a convenient alternative. Consult a qualified financial professional to determine which option is best for your specific circumstances. |
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| Q) | Are disability benefits taxable? |
| A) | In general, any disability benefits that are attributed to employee contributions are not taxable but benefit payments that are attributed to employer contributions are taxable. For example, if your employer has paid 100% of your disability insurance premium, then 100% of any benefit you receive is taxable. If you have paid 100% of your disability insurance premium with after-tax dollars, then none of the benefit that you receive is taxable. If you are contributing 60% of your disability insurance premium with after-tax dollars, then 60% of any benefit you receive is not taxable. Because individual circumstances can vary, you should consult your tax professional about your specific situation. |
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| Q) | When do my disability benefits begin? |
| A) | Your disability Certificate of Coverage will specify the length of time you must wait before your benefits can begin. In a Short Term Disability plan, there may be different waiting periods depending on the cause of your disability (accident or sickness) and the waiting period is usually less than 30 days. In a Long Term Disability plan, the waiting period (or elimination period) and can be from 90 days to one year. |
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| Q) | How do I file a claim for benefits? |
| A) | A Short Term Disability Claim Form can be obtained from this website or from your employer. You, your employer and your physician must complete the appropriate sections of the form and forward it to TruAssure. If applicable, a copy of the approval/denial letter from your Workers’ Compensation carrier must be attached. |
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| This FAQ is intended for general informational purposes only. You should consult the appropriate financial professional about your specific situation and financial needs. | |