Supplemental disability insurance is a type of coverage that is utilized in addition to any pre-existing disability plan that may already be in place for the insured party. In many cases, insurance plans of this type help to cover medical and other expenses related to a disability that are not covered by disability insurance provided by an employer. By securing this additional or supplemental disability insurance, consumers can often receive benefits that amount to anywhere from 80% to all of their pre-disability income.
The purpose of supplemental disability insurance is to provide benefits above and beyond those provided by employer sponsored disability plans. In many cases, an employer plan may provide a disabled employee with anywhere from 50% to 60% of his or her former income. On this amount alone, the disabled employee will be forced to make significant changes in lifestyle, possibly foregoing necessities in order to stay within the reduced monthly budget. When a private supplemental policy is in place to augment the benefits received from the employer plan, it is normally possible to obtain at least another 20% in monthly benefits overall. This additional income can make a huge impact on the quality of life for the insured party.
Many supplemental disability insurance policies include provisions for both short-term disability coverage and long-term disability insurance benefits. Depending on the terms associated with the plan, the insurer may begin to extend the benefits as soon as the primary policy through the employer confirms the status of disabled and begins to issue benefits on a monthly schedule. In some cases, the underwriter for the supplemental policy may choose to have their own team examine the information available regarding the disability claim and arrive at an independent conclusion. When this is the case, it may take a couple of months for the evaluation to be completed. Once that is done and if the claim is approved, the insured party will begin to receive benefits based on the provisions found within the policy.
The cost for supplemental disability insurance will vary, based on the types of health issues that are covered in the terms and conditions. Some plans allow consumers to provide annual or semi-annual premium payments for the coverage, while others are structured with monthly premium plans. In some cases, the premiums for supplemental disability insurance can be set up as a payroll deduction line item, with the employer withholding the amount of the premium from the wages or salary of the employee and forwarding the amount to the insurance company on his or her behalf.