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A typical disability insurance benefit usually amounts to a significant percentage of a policy holder's regular income. Disability insurance benefits may vary from plan to plan, but many programs provide about 50 to 70 percent of a policy holder's regular income as a benefit. The amount of time for which a person may receive a disability insurance benefit may vary as well. Typically, however, short-term disability plans provide benefits for up to about a year or two, and many feature an average benefit term of about two to three months. In contrast, long-term disability insurance benefits typically last for more than two years.
Not all disability insurance plans are created equal, and the benefits and features provided may differ with each one. A typical policy, however, will usually pay a percentage of the weekly income a person would normally receive from work or self-employment. Most policies provide between 50 and 70 percent of a policy holder's income, and policies that pay 70 percent are among the most common. While this may leave a person lacking some of the income he is used to, many people agree that receiving a significant portion of one’s income is better than not receiving any of it.
Typical disability benefit payment time frames fall into two basic categories: long term and short term. A short-term disability policy may include benefits for up to two years. Often, however, these plans pay benefits for even shorter periods of time. For example, many pay benefits for just a few months rather than a year or more. This may seem a short period of time to have coverage, but individuals who want extended coverage may choose long-term insurance instead.
The term of disability insurance benefit coverage a person may enjoy with long-term disability coverage depends on the plan. Most, however, pay benefits for two years, five years, or up to the time a person reaches retirement age. In fact, there are even some plans that pay benefits for a lifetime if necessary. Most disability insurance policies do, however, restrict the payment of benefits to a specific length of time or end them at a particular age.
Individuals usually have many choices when it comes to choosing a disability insurance plan. As such, a person may choose one that offers a higher disability insurance benefit or pays benefits for a longer term. In most cases, however, longer coverage and higher benefits also translate to higher insurance premiums.
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