Below you'll find frequently asked questions about Texas Short-Term Disability Insurance	Get A Quote Here

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Workers' compensation insurance pays an employee only for time lost because of work related injuries and work related sickness - not for time lost because of disabilities not incurred on the job.

Employees can purchase disability insurance to replace their lost income they might suffer do to short-term or long term disability not related to work.

You can also get group coverage that provides employees with an income for life in case of permanent disability resulting from work-related sickness or accident.

Frequently Asked Questions

Who Needs It?	Who Offers Coverage?	How Much Do I Need?
What To Know When Buying	Where To Buy It?	Options And Features
Government Disability Benefits	Individual Disability Insurance	Changes In Life Events

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Texas Short-Term Disability Insurance, Houston Texas Disability Insurance,
Group Short-Term Disability Insurance Texas,

Who Needs It?
Ask most people to think about their most valuable asset, and they'll mention their home, their car, their jewelry, or other possessions. But for most of us, our most valuable possession isn't anything of those things ­ it's our ability to earn a living. And just as you would insure your car, your home, and other valuable possessions, you need to insure yourself in case you are no longer able to work. That's what disability income insurance does ­ it provides a source of replacement income if you're unable to work due to an illness or accident.

If becoming disabled may seem unlikely, the odds may surprise you. Nearly 1 in 5 Americans will become disabled for 1 year or more before the age of 65.

The other thing to keep in mind is that an accident or illness that keeps you out of work for a period of time can be very costly. That's because people who become disabled not only need to continue providing for loved ones, but for themselves as well. A disabling injury or illness could lead to medical bills, modifications to your car or home, or other unforeseen needs that can be quite expensive. For all these reasons, almost anyone who works ­ whether they're single, married, with children or without ­ should consider disability income insurance.

When most people think about insuring their valuables, they think about their car or their home. But your most valuable asset is actually your ability to earn a living. Insuring your livelihood is more important than insuring your possessions, and that's what disability income insurance does: it provides you and your family with an income if you're too sick or injured to work.

Explore this section to learn more about disability coverage, including the different types of policies and how to find an agent or company. An insurance needs calculator can help you determine if you should consider buying an individual disability insurance policy.

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Who Offers Coverage?
Most employers offer some form of group disability income insurance. However, the features and benefits of group coverage can vary greatly, so it pays to know the specifics of what your group policy offers.

The first step is to find out whether your employer offers short-term disability coverage, long-term disability coverage, or both.

Short-term disability coverage usually provides a portion of your salary for anywhere from three to six months and sometimes up to one year. This coverage is often adequate for illnesses and injuries from which you can quickly recover. The length of coverage depends on the policy, and in some cases, where you live. For instance, Hawaii, New Jersey, New York, and Rhode Island require most employers to provide disability benefits for up to 26 weeks. In California, most employers must provide coverage for up to 52 weeks. If you become disabled, coverage may begin right away, or there may be a waiting period (also called an "elimination period").

Long-term disability coverage, designed for illnesses or injuries that sideline you for an extended period of time, Benefits from these policies generally continue until either age 65 or your retirement age under Social Security. While no laws require employers to provide long-term disability coverage, about half of all mid-sized and large employers provide some firm of long-term disability income insurance. Long-term coverage often kicks in when short-term coverage ends. If no short-term disability coverage exists, there may be a waiting period (also called an "elimination period") of up to several weeks before benefits will be paid.

The next thing you'll want to find out about is the benefit level, or how much money you will receive if you become disabled. Short-term disability policies may pay a high percentage of your salary, even 100 percent, but only for a limited period of time. Long-term disability policies typically pay less, often 40 percent to 60 percent of your current pay, although you may be able to purchase additional coverage through your employer.

Several factors can affect the amount of your disability payments from your employer. There may be a monthly cap on the dollar amount that you can receive, such as $3,000 or $4,000 per month. Because of this cap, if you earn a high salary, your long-term disability may pay less than you think. Paying your premiums with pre-tax dollars (your paycheck usually notes this) can also reduce your benefit level, since in most cases, benefits will then be taxable. Additionally, the company's policy may deduct other payments, such as Social Security, from your benefits when calculating your total benefit.

The final piece of the puzzle and a very important one is understanding how your group policy defines a disability. For instance, some policies define it as the inability to perform any job for which you are reasonably qualified by training, experience and education. Others may define it as the inability to perform your specific job. Some may even mix the two, providing own occupation coverage for an initial period, such as one or two years, and any occupation coverage after that.

To learn more about your group policy, start with your employer's benefits office or human resources department. Some good questions to ask are:

• What type of group disability coverage does the company offer?
• How does the policy define a disability?
• If I become disabled, how long do I need to wait until benefits begin?
• How much does the policy pay? Is there a monthly maximum?
• How long will my payments continue?
• Does the policy take other disability coverage (such as government programs) into account when calculating my long-term disability pay?

An insurance professional can review the answers to these questions with you, help you understand what other income might be available in the event of a disabling injury or illness, and advise you as to whether an individual disability insurance policy might be necessary.
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How Much Do I Need?
If someone in your family suffers a long-term disability, it can be more taxing on your family's financial situation than if that person were to die. Why? Because when someone dies, their income stops, but so does their consumption of goods and services. By contrast, when a person becomes disabled, their income stops but their expenses continue. In fact, a disabling injury or illness often results in increased spending on things like medical bills, modifications to your car or home, etc.

The best way to determine how much disability income insurance you need to protect your loved ones is to meet with a qualified insurance agent. This professional can conduct a thorough needs analysis that determines the amount of disability income insurance that's right for you.

For a sense of how a disability can impact a family's finances, consider Don and Pat Smith. Don and Pat live in a Midwestern city and are the parents of a nine-year-old boy. Don, 35, earns $35,000 a year selling cars. His monthly take-home pay is $2,129. After staying home several years to care for their daughter, Pat is now a part-time receptionist in a local dental office. She brings home $560 a month.

Don and Pat are able to support their lifestyle until Don becomes ill due to Parkinson's disease and can no longer work. Suddenly, there is a dramatic reduction in the Smith's income. Don isn't eligible for Social Security disability. (To be eligible, Don would have to demonstrate that he is unable to engage in any gainful work that exists in the national economy, regardless of whether such a job exists in the area in which he and Pat live.) Don has no prior military or civil service that might qualify him for other government disability programs. He does not qualify for workers' compensation benefits because his illness is not job-related.

The specifics of what happens next depend greatly on whether Don's employer offers group disability benefits, whether these benefits are short-term (STD) or long-term (LTD), whether the policy includes a cost-of-living adjustment, and how the group policy defines disability.

If Don's employer does provide group LTD, Don would be entitled to benefits under his employer's policy -- probably up to 60 percent of his gross salary, or $1,750 a month. Of this amount, he would have to pay $219 in federal income taxes and $109 in state income taxes, since his group premiums were paid with pretax dollars. To continue his family's group medical policy, he will have to increase his premiums to include the portion previously paid by his employer. Under this scenario, the Smith's monthly income (including Pat's current salary) would drop almost 30 percent. If Don's employer didn't provide any disability benefits, the Smith's would have had no choice but to almost immediately begin spending down whatever savings they might have accumulated up to that point in their lives.

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What To Know When Buying

• To locate an insurance professional, seek recommendations from friends and professionals such as lawyers and accountants. Ask about this person's experience and background, and make sure he or she specializes in the advice and products you need. Once you have decided on an individual, be sure to provide that person with all relevant financial information.
  
  
• While you shouldn't put off an important decision that would provide protection for your family, take the time to make sure you fully understand any policy you are considering. You should be comfortable with the company, agent and product before purchasing anything.
  
  
• Be sure the insurance agent gives you choices and options before you make a final decision.
  
  
• Review the copy of your application contained in your policy. Promptly notify your insurance agent or company of any errors or missing information.
  
  
• After you have purchased an insurance policy, keep in mind that you may have a "free-look" period, usually 10 to 30 days after you receive the policy, during which you can change your mind. Read your policy carefully during this time. If you decide not to keep it, the company will cancel the policy and provide an appropriate refund.
  
  
• Review your policy periodically or when changes occur such as purchasing a home or having children. An insurance agent can help you make sure your coverage is always aligned with your needs.
  
  
• When you replace one policy with another you incur new costs and fees. That's why, generally speaking, it's in your best interest to keep a policy you already have and add on to your insurance protection, instead of replacing an existing policy. If you do decide to cancel a policy, contact the original agent or company first to make sure you fully understand the financial ramifications.
  
  
• If you have a concern or complaint, start with your insurance agent who can often troubleshoot problems for you. If you're still dissatisfied, most state insurance departments have a consumer affairs division that handles complaints or you can contact your insurance company's customer service division.
  
  

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Where To Buy It?
Once you've determined that you have a need for disability income insurance, you then need to decide where to buy it. And this is not a decision you want to take lightly. After all, purchasing the right amount and kind of disability income insurance might end up being the most important financial decision you'll ever make.

So what are your options? Because so many variables are involved in figuring out how much and what kind of disability income insurance to buy, it shouldn't come as a big surprise that most people prefer to buy disability income insurance through an insurance agent or other financial advisor. A good agent will take the time to carefully assess your financial situation and long-range objectives, and then work with you to find the right products for your specific needs.

If you decide to go the insurance agent route, we encourage you to read the choosing an agent information that you'll find in this section. It'll provide you with useful tips for building a productive relationship with your insurance advisor.

This section also contains information to help you pick the right insurance company or to check up on a company that someone has recommended to you. Buying disability income insurance through an agent is the most common way to purchase, but by no means the only way. Buying through the workplace or direct via a toll-free number or the Internet are other options you may want to consider. Explore the choosing an insurance comoany part of this section for more information about your purchasing options.

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Options And Features

When evaluating disability income insurance policies, here are the most important terms with which you should be familiar:

Amount of Benefits
Policies usually pay 40 to 60 percent of pre-disability earnings. Monthly benefits are calculated in terms of stable, earned income at the time of purchase. Most insurers, not wanting to provide benefits so sizable that they would encourage workers to remain at home, limit benefits from all sources to no more than 70 to 80 percent of monthly income. Because of caps that limit how much can be paid out in any one month, lower-paid workers may receive a larger portion of their pre-disability incomes than higher-paid workers.

Definition of Disability
Some policies pay benefits if you are unable to perform the duties of any occupation for which you are reasonably qualified by training, experience and education. Other policies pay benefits if you are unable to perform the major duties of your own occupation. Some policies will combine these features. Be sure to ask your insurance agent how disability is defined in policies you are considering.

Extent of Disability
Some policies require that you be totally disabled before payments begin. Partial disability sometimes is covered for a limited time but most often only if the partial disability follows a period of total disability for the same cause. Some policies may not require total disability before partial disability payment.

"Residual" Benefits
If you are able to work but your income is reduced because you cannot fulfill all of your job responsibilities, residual benefits can help to make up the difference in your income. A standard feature in some policies (added with a rider to others), a residual benefit allows partial payment based on your loss of income, generally without prior total disability.

Presumptive Disability
Even if you can still perform some or all of your regular job responsibilities, you are presumed fully disabled and are entitled to full benefits under specified conditions, such as loss of sight, speech, hearing, or use of limbs.

Guaranteed Renewable
Guaranteed Renewable policies are one of the two major types of disability income policies. These types of policies can never be cancelled as long as premiums are paid. Additionally, premiums cannot be raised based on an individual's circumstances, but they can be raised for an entire class of policyholders.

Non-Cancellable
Non-Cancellable policies are the other major type of disability income policies. These types of policies can never be cancelled as long as premiums are paid, and premiums are guaranteed not to increase.

Portability
Portability refers to whether or not you can take coverage with you. One of the biggest advantages of owning an individual disability policy is that it's completely portable. You own it and it follows you from job to job. By contrast, employer-provided coverage is almost never portable.

Elimination or Waiting Period
Today's policies allow you to decide when benefit payments begin. You're asked to choose a waiting period at the time of application; these range anywhere from the 31st day to six months or more after the onset of the disability. Depending on how much money you have saved, and your other resources, you can reduce your premiums by electing to wait 60 days, 90 days, or even six months before you start to receive benefit payments. Remember, though, that the first check is usually not paid until 30 days after the waiting period.

Length of coverage
A disability income insurance policy can pay benefits for a finite number of years, say, one year, two years or five years, or it can pay to age 65 or even for a lifetime. Since disability benefits are designed to replace the income you would otherwise earn by working, most people do not need benefits extending beyond the working years. Electing shorter benefit periods can save premium dollars, but bear in mind that if you need this insurance at all, you probably need it most to cover a disability that permanently removes you from the workforce. A lengthy disability threatens your financial security much more than a short-term disability.

Inflation Protection
For an additional premium, you can add a cost-of-living adjustment (COLA) to basic disability income coverage. This provision increases benefit payouts by a specified percentage, generally 4 to 10 percent, after each year of disability and can be important during a lengthy period of total disability. While this is a relatively expensive option, it could be vital to maintaining your standard of living if you're out of work for a very long period of time.

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Government Disability Benefits
The Social Security Administration (SSA), the federal agency that is best known for administering retirement benefits to older Americans, is also a potential source of disability benefits. In fact, more than $4 billion in Social Security disability payments are sent to 7 million Americans each month. The more important figure, however, is what the average person can expect to receive. Currently, the average monthly payment for a disabled worker is $817, or just slightly greater than the poverty guidelines. In addition to only replacing a limited portion of the average person's salary, the qualifications to receive benefits from Social Security Disability Insurance are very strict. Consider the following:

• 70 percent of those who apply for Social Security disability benefits are denied.
• Eligibility is based on being unable to perform any gainful employment; not just the job you were performing at the time the disability began.
• You are eligible for benefits after you have been disabled for 5 months and if the disability is expected to last 12 months or to result in death. Claim processing may take up to 3 months.
• Benefit levels are limited based on the number of eligible quarters a person has paid into the Social Security program.
• Social Security payments may be reduced by disability entitlements under other government programs, including government pensions, workers' compensation, civil service, and military programs.
• Social Security disability payments are subject to federal income tax if your "combined income" adjusted gross income plus any nontaxable interest income and half of your Social Security benefits exceed $25,000 per year.

This is not to say that disability benefits through Social Security are unimportant and can't ever be relied on if you become disabled and are unable to work. But it's important to understand that benefit payments tend to be modest and most people won't qualify for benefits. So if you or your loved ones would face financial adversity if a disability were to sideline you from work for a period of time, make sure you have more than just Social Security on which you can turn to for replacement income.
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Individual Disability Insurance
The most flexible and reliable source of coverage is an individual disability income insurance policy you purchase on your own. If you are unsure that you need an individual disability policy, complete the following exercise.

Add up all benefits you would receive in case of a disability, including group coverage, government benefits, and other programs mentioned in this section, along with any other monthly income you could count on, such as income from savings, investments or alimony payments.

Now add up all your monthly expenses, including home, car and other debt payments, food, clothing and living expenses, and payments to maintain future needs, such as retirement or your children's education.

If the total income you would receive approaches your expenses, you can assume that you would be able to pay your day-to-day expenses while disabled. If the total income would not be adequate to support you and your family, you may want to consider buying an individual disability income insurance policy to make up the difference. To get a better sense of your disability insurance needs, refer to the Disability Needs Calculator in this section. Better yet, consult with a qualified insurance professional who can conduct a more thorough disability insurance needs analysis and walk you through the myriad of factors you need to consider when contemplating an individual purchase.

When you meet with an insurance professional, here are some of the many questions you'll want to address:

• How is disability defined? Inability to perform your own job? Inability to perform any job?
• Does the policy cover accidents? Illness? Are benefits available for total disability? For partial disability? Only after total disability?
• Are full benefits paid, whether or not you are able to work, for loss of sight? Speech? Hearing? Use of limbs?
• The maximum benefit will replace what percentage of income?
• Is the policy non-cancelable, guaranteed renewable, or conditionally renewable?
• How long must I be disabled before premiums are waived?
• Is there an option to buy additional coverage, without evidence of insurability, at a later date?
• Does the policy offer an inflation adjustment feature? If so, what is the rate of inflation? Is there a maximum?
• What is an adequate level of benefits if you are disabled, in relation to your present and future obligations?
• How long of a waiting period should you select to fit your circumstances until benefits begin?
• How long do you want to receive disability income should it become necessary?
• How much coverage are you eligible for at your present salary?

Lastly, remember to ask your agent or financial advisor to explain anything that is unclear. Ask for a summary of each policy's benefits, which will provide you with an outline of coverage. And once a recommendation has been made, always ask for the insurance company's ratings. A.M. Best Company, Standard & Poor's and Moody's Investor Services are three ratings agencies you may want to turn to check on the financial health of a company with which you may want to do business.
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Changes In Life Events
Changes At Work
If you work for a company that provides its employees with group disability income insurance, benefits typically replace a fixed percentage of your salary, say, 50 percent. So if you get a raise, your disability benefit will automatically adjust upward. An exception would be if you are a fairly well compensated employee and your income already places you at your company's maximum monthly cap for disability payments, often set around $4,000 or $5,000. In these instances, if you get a raise and you're concerned about the loss of income that would occur if you were to become disabled, you can always seek to supplement your group coverage with an individually purchased policy.

If you work for a company that provides a group benefit but decide to go into business for yourself, you'll definitely want to consider buying individual coverage. Because if you were suddenly unable to work, there now would be no employer-sponsored safety net to fall back on. For the same reason, if you're self-employed and your income increases significantly, you probably should increase coverage you already own or purchase a supplemental policy.

Changes At Home
If you become disabled and are unable to work, you'll be in a financial pickle if you don't have a source of replacement income to help make ends meet. That need becomes even more pronounced when other people become dependent on your income like, say, your new spouse or newborn child. A less obvious example might be if an elderly parent becomes dependent on your income. So every time there's a change in your family situation, either in your immediate or your extended family, make sure you take a minute to carefully consider whether that change should trigger a reevaluation of your disability income insurance needs.

Changes In Your Finances
As your income increases, you should consider increasing your disability income insurance coverage because you would have to replace a higher amount of income to keep pace with the higher standard of living to which you and your family have become accustomed. When you buy individual coverage, it sometimes makes sense to pay extra for something called a Future Purchase Option rider. This provision ensures that health issues that may have arisen since you purchased your policy won't prevent you from increasing your coverage.

You'll also want to consider buying individual disability income insurance (or increasing existing coverage) every time you assume a significant amount of new debt. The bills won't stop just because you've been in an accident and are unable to work for a period of time. So you'll need a source of replacement income to make sure that you'll still be able to make your mortgage or car loan payments. This information is quotes from The Life and Health Insurance Foundation for Education website www.life-line.org

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