The Merriam-Webster dictionary defines supplemental as being available to supply something extra when needed.
Supplemental short-term disability insurance is available to supply extra income protection when needed. But, you must buy the coverage ahead of time.
This article explains why you should buy extra coverage today by looking at your future needs.
- Gaps in government insurance programs that need filling
- Features causing existing disability programs to fall short
- Why women planning a pregnancy should maximize benefits
Extra Disability Income
People should buy supplemental short-term disability to fill gaps in government programs. Avoid learning about these holes the hard way.
Buy a private policy before you get sick, hurt, or pregnant.
Social Security Disability
Buying a private insurance policy is a good way to add to Social Security Disability Insurance (SSDI). Workers must pay FICA payroll taxes, but SSDI has significant gaps.
SSDI covers temporary medical conditions but has three main flaws:
- The SSA must expect the disability to last at least 12 months.
- Benefits start after five months of lost income.
- The monthly amount is relatively small.
Workers Compensation
Short-term disability complements Workers’ Compensation Insurance, which covers part of your income for work-related accidents and illnesses. Most states require employers to buy this coverage.
However, most injuries and sicknesses happen off the job, and only nine states require programs for non-work-related losses.
State Disability
A private policy can add to state-mandated temporary disability programs. Please do not assume you have this coverage or that it meets your needs.
Only nine states require temporary disability benefits. You have no coverage if you work in one of the other forty-one states.
Even in the nine states with mandatory programs, the benefits may not be enough. Some states have low weekly limits, and others stop payments too soon.
Health Insurance
Short-term disability complements health insurance by replacing part of your income. Health insurance pays doctors and hospitals to limit your out-of-pocket medical costs.
If you need medical care due to an accident or illness, you likely cannot work. Your health insurance covers medical bills but does not support your income.
Extending Insurance Features
Supplemental short-term disability can boost the income insurance you already have. Employer-funded, state-mandated, and government programs often do not provide enough benefits.
Elimination Period
You can buy additional short-term disability to shorten the elimination period in your already-established coverage. Many people need benefits that begin more quickly because they lack an adequate cash emergency fund.
For example, many long-term disability policies have lengthy elimination periods of three or six months. Can you pay for housing, food, and transportation that long without an income stream?
Monthly Amount
You might want to buy a second short-term disability policy to increase your monthly benefit if your current coverage is insufficient. Ideally, you should replace 66% of your earnings.
The monthly amount a disability policy pays depends on your state (if mandatory) or what you chose when you applied. Insurance companies let you stack benefits as your income grows.
Most private policies do not adjust for the cost of living. You need extra coverage to keep up with your needs.
Benefit Period
You might want to extend your short-term disability coverage to increase the payment period. Many government programs have a benefit gap of six months or more.
SSDI covers disabilities lasting at least twelve months, while the nine state programs stop payments after six months or less. How will you pay for housing, transport, and groceries if you are out of work for seven, nine, or eleven months?
Enhancing Pregnancy Disability
Women planning a pregnancy have a great reason to buy supplemental short-term disability insurance. They can influence future outcomes.
It helps to get higher monthly benefits that start quickly and last longer. But you must buy the coverage before conception to avoid claims denials for a pre-existing condition.
Increased Amount
Women should buy extra short-term disability coverage before conception to increase their monthly benefits. Although insurance is for unforeseen events, you are planning to miss at least six weeks of work due to pregnancy.
Maximize the monthly amount when you know you will need it.
- Doctors prescribe bed rest for one-third of women before birth.
- Most policies cover recovery from labor and delivery.
- Many women have postpartum complications.
Faster Benefits
Women should buy extra disability coverage before conception to get benefits that start quickly. A short elimination period makes sense because the policy pays for a fixed time for normal labor and delivery.
Normal childbirth has a set claims period:
- Vaginal delivery: six weeks
- C-section: eight weeks
If your current coverage has a 3-month elimination period, it won’t cover normal childbirth. Adding a second policy with a one-week elimination period and a 3-month benefit period would fill this gap perfectly.
Longer Coverage
Women should consider buying extra disability coverage before conception to extend their benefit period. You don’t want claims to end while recovering from postpartum issues. I
f your current policy has a 3-month benefit period, you could face serious problems in three scenarios:
- Two months of pre-birth pregnancy disability.
- Twelve weeks of recovery from a C-section.
- Two months of postpartum disorders.
A second policy with a 3-month elimination period fits perfectly. It covers seven months of pregnancy-related income loss and comes with an affordable premium.
