If you’ve ever worked full-time, you might know about ‘disability insurance’ since many companies offer this benefit. Employers typically provide short-term or long-term disability insurance, sometimes even both. Self-employed folks might have their own personal plans.
You might also have heard of long-term care insurance (LTC), or it might be new to you. It’s easy to confuse the two types of insurance since they seem similar, but they cover different needs.
**Disability Insurance**
Disability insurance, or “disability income,” helps cover a portion of your earnings when you can’t work due to a serious injury or a long illness. However, it doesn’t cover workplace injuries—that’s what Worker’s Compensation does.
Insurance companies will look into your medical history and evaluate your job. If your job is considered risky, you might be labeled as “high risk,” which could impact your coverage options.
There are two main types of disability coverage:
1. **Short-term disability**: This kicks in to cover your income for a certain period, usually starting about 14 days after you’re injured.
2. **Long-term disability**: Similar to short-term but for a longer period. It can last from 2-5 years or even until you turn 65, depending on the policy.
**Long-Term Care Insurance**
While disability insurance covers your income when you can’t work, it doesn’t help with “activities of daily living” (ADL) like eating, bathing, or maintaining continence. This is where long-term care insurance comes in, covering the costs of services that help with these daily activities.
Long-term care insurance is crucial for people who can’t perform basic functions because of aging or chronic illnesses like Parkinson’s or Alzheimer’s. It covers options like nursing home care, assisted living, home healthcare, or hospice care. While often associated with the elderly, people of any age can use it.
**In Conclusion**
Disability and long-term care insurance have different roles. Disability insurance supports your income during recovery but won’t help you with daily tasks. Long-term care insurance covers the services needed when basic functions are lost. Understanding both types of insurance is important to avoid burdening your loved ones and to ensure you have the right support when you need it.