FAQs About Disability Insurance
- What is the difference between short-term and long-term disability insurance? Short-term disability insurance typically provides coverage for temporary disabilities, while long-term disability insurance offers coverage for more extended periods or until retirement age.
- Do I need disability insurance if I have savings or emergency funds? While savings and emergency funds are essential, disability insurance provides additional financial protection and ensures ongoing income replacement if you are unable to work due to a disability.
- Can I purchase disability insurance if I have pre-existing medical conditions? Yes, although individuals with pre-existing medical conditions may face limitations or higher premiums, it is still possible to obtain disability insurance coverage.
- Is disability insurance coverage taxable? The tax treatment of disability insurance benefits depends on various factors, including whether the premiums were paid with pre-tax or after-tax dollars. Consult a tax professional for personalized guidance.
- Can disability insurance cover partial disabilities? Yes, some disability insurance policies offer coverage for partial disabilities, providing benefits if you can work but at a reduced capacity due to a disability.