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Beginner’s Guide to Disability Insurance

The importance of life and disability insurance affects the entire family. It’s difficult to consider or plan for, but life and disability insurance might keep your family’s financial situation stable if you were to suffer a fatal or incapacitating accident or illness that prevented you from earning an income for your family.

Minutes to Read: 10 minutes

Age Bracket: 25 -55 years old

What is disability insurance?

If you become too ill or wounded to work, disability insurance offers a portion of your income so you can cover your expenses. Disability affects more people and occurs more frequently than you may imagine. In actuality, illnesses—including common disorders like heart disease and arthritis—are the leading cause of impairments.

Some firms provide their staff with short- and long-term disability insurance. In the immediate aftermath of an occurrence, a short-term policy can be helpful, while a long-term coverage can help give financial security for disability that could persist for years. In order to help give additional financial security, you can also pay for supplemental coverage on top of the benefits you receive at work.

Who is disability insurance for?

You should undoubtedly think about disability insurance if you rely on your income from employment to cover your expenses. In the event that you become too ill or disabled to work, it guarantees that you can still get a portion of your salary.

How does disability insurance work?

If you suffer from a serious sickness or an injury that keeps you from working, the majority of disability insurance policies will reimburse you for a portion of your income. Some compensate you if your injury lasts for a long time, while others reimburse you in the short term just after an incident. In addition to your regular disability insurance plans, you can now buy supplemental disability insurance, which pays out income.

What makes disability insurance necessary?

Accidents happen, and we never know if or when we’ll be diagnosed with a disease, condition, or injury. For these reasons, it’s crucial to have a disability policy that will assist you in covering your financial obligations in the event that you are unable to continue receiving your regular paycheck from work. Start by calculating the actual cost of income protection.

What advantages does disability insurance offer?

People may mistakenly believe that catastrophic events, such paralysis from a car accident or a crippling stroke, are what constitute a “disability,” for example. But most disabilities are caused by less serious accidents and more frequent illnesses including pregnancy, back pain, depression, and digestive problems.

“Mental health,” which includes substance misuse, is one of the diagnosis categories that has grown the fastest over the previous five years, along with intestinal and circulatory, according to a review of Guardian disability claims.

Definition of disability

Disability is defined as any loss or impairment of a member’s normal physical and/or mental capacities that prevents them from working or engaging in any other gainful activity, which results in a loss of income, permanently or temporarily. Based on the length of time a member has been unable to work and the actual amount of income lost, members are granted the equivalent disability payments for each type of disability.

A permanent total disability, a permanent partial disability, and a temporary total disability are the three categories of disability that GSIS determines based on accepted medical standards.

1. Permanent Total Disability (PTD)

A type of disability brought on by an illness or injury that renders a person totally and permanently unable to work or engage in any other gainful activity, which results in a loss of income. Total and permanent disability include the following:

complete loss of sight for both eyes;
loss of two limbs at or above the ankle or wrists;
permanent complete paralysis of two limbs;
brain injury resulting in incurable imbecility or insanity; and
such other cases as may be determined and approved by GSIS

Eligibilities.

PTD benefits are due to members who become fully and permanently disabled in the following situations:

at the moment of disability while serving; or
If you were discharged from the service, you must have paid at least 36 months’ worth of contributions in the five years immediately preceding your disability, or at least 180 months’ worth of payments overall, before your impairment.

However, provided that the following prerequisites are satisfied:

prior to the onset of the handicap, having a job providing a living;
not a registered participant in any social insurance organization;
not getting any other pension, whether it be from GSIS or another institution or organization in your country or abroad.

Benefit.

Members who become totally and permanently disabled are entitled to basic monthly pension (BMP)-equivalent lifetime income benefits starting on the date of disability. To members who were in service at the time of the permanent total disability and who have made a total of 180 monthly payments, in addition to the monthly income benefits for life, a cash payment equal to 18 times the basic monthly pension (BMP) will be made.
The only compensation that separated members are eligible for is cash equal to 100% of their average monthly compensation for each year of service with paid contributions, but not less than 12,000 pesos, if they have at least three years of service and become permanently and totally disabled. However, they must not have paid a total of at least 180 monthly contributions prior to the disability (Php12,000.00).

2. Permanent Partial Disability (PPD)

A temporary inability to work due to a complete and permanent loss of the use of any of the following:

any finger
one arm
one foot
any toe
one hand
one leg
one or both ears
hearing of one or both ears
sight of one eye
such other cases may be determined and approved by the GSIS.

Eligibilities.

Members who have a partial disability are eligible for the PPD benefit when:

at the moment of disability while serving; or
Have paid at least 36 months’ worth of payments within the five years immediately before to the incapacity, or have paid at least 180 months’ worth of contributions overall, if you were separated from the service.

However, provided that the following prerequisites are satisfied:

gainfully employed prior to the onset of the disability that resulted in income loss, as demonstrated by any conclusive proof thereof;
not a registered participant in any social insurance organization;
not getting any other pension, whether it be from GSIS or another institution or organization in your country or abroad.

Benefit.

After a proper medical evaluation, the PPD benefit time is decided; nevertheless, the benefit length cannot exceed 12 months for the same scenario. Only unpaid leaves of absence taken during the period of entitlement that have been duly verified by the appropriate officer of the organization where the member is employed are eligible for compensation.
By dividing the BMP by 30 days and calculating the quotient by the total number of compensable calendar days of unpaid leave, the PPD benefit is calculated (LWOP).

3. Temporary Total Disability (TTD)

The term is used to describe the temporary inability to work or engage in any lucrative occupation, even after the impaired physical and/or mental faculties have been restored to their normal functions.

Eligibilities. When: Members are eligible for the TTD benefit.

at the moment of disability while serving; or
If you were discharged from the service, you must have paid at least 36 months’ worth of contributions in the five years immediately preceding your disability, or at least 180 months’ worth of payments overall, before your impairment.

However, provided that the following prerequisites are met:

prior to the onset of the handicap, having a job providing a living;
not a registered participant in any social security organization; and
not getting a pension from GSIS or any other local, national, or international agency or organization.

Subject to a medical review, GSIS may decide to award the TTD benefit for a total of 240 days.

Benefit.

The period of eligibility for TTD benefits is determined following a thorough medical examination and proof of an actual loss of income-producing work capacity through the incurred actual number of unpaid leave days duly certified by the authorized agency officer where members are employed; however, this period of eligibility for benefits should not exceed 120 days in a single calendar year.
The payment of TTD may, however, be prolonged by GSIS up to a maximum of 240 days if the handicap necessitates more prolonged treatment lasting longer than 120 days. Only the unpaid leave(s) taken during the term of entitlement are compensable.
However, eligibility begins on the fourth day of the impairment. The number of days of disability based on the medical examination is multiplied by 75% of the daily wage of the members, but the total number of days for the same contingency cannot exceed 240. The calculated daily salary, however, could not be less than Php70.00 or greater than Php 340.00 each day.

For you to qualify for benefits under a disability policy, you must meet a specified definition of disability. The two definitions that disability insurance providers employ most frequently are:

Own occupation: If a person is unable to perform the occupation they held before being disabled, they are deemed disabled.
Any occupation: If a person is unable to perform any profession at all, they are termed disabled.

Benefits for People with Disabilities from SSS

In the event of an illness or accident, it provides cash.

All disability insurance plans—short term, long term, supplemental, or individual—help safeguard your finances at a time when you might be at risk of losing them. The major federal programs that help people with impairments are the Social Security and Supplemental Security Income disability programs. Although these two systems differ greatly from one another, they are both managed by the Social Security Administration, and only those with a handicap who meet certain medical requirements are eligible for payments under either program.

If you are “covered,” which means that you have worked long enough and paid Social Security taxes, Social Security Disability Insurance distributes benefits to you and specific members of your family. Benefits from Supplemental Security Income are paid according to financial necessity.

When you submit an application for either program, we will gather medical and other data about you and determine whether you fall within the Social Security Administration’s definition of disability. We’ll occasionally need updated details on your condition. Possibly, you will get a Disability Update Report (SSA-455). You may now submit this form online.

When To Apply

As soon as you become incapacitated, you should apply.

Benefit payments for Social Security Incapacity Insurance (SSDI) do not start until the sixth complete month of disability due to a five-month waiting period. The first full month following the date we determine your disability began is when the SSDI waiting period starts.
If your amyotrophic lateral sclerosis (ALS)-related impairment is approved for SSDI benefits on or after July 23, 2020, there is no waiting period.

For the first complete month following the day you filed your claim—or, if later, the date you became eligible for SSI—we pay Supplemental Security Income (SSI) disability benefits.

How To Apply

You can apply for disability benefits online or by contacting their toll-free number, 1-800-772-1213, between 8:00 a.m. and 5:00 p.m., if you are unable to finish the application online. and 7:00 p.m. You can schedule a time to apply with one of their reps.
Call their toll-free “TTY” service at 1-800-325-0778 between 8:00 a.m. and 8:00 p.m. and 7:00 p.m. between Monday and Friday.

Protection for small company owners

Disability insurance for small business owners can also help safeguard the critical areas that might be impacted by their absence, such as:

Coverage for business expenses
Ensure that you can repay company loans.
In the event that your business partner is ill or injured and cannot work, protect your company.

*Females more likely than males to experience severe and moderate disability

*Almost a third of population age 60 and older experience severe disability

Here are the types of disability insurance:

● Individual disability insurance

If you don’t have access to disability insurance via your job, you may want to consider purchasing individual disability insurance. For wealthy earners searching for additional coverage, it is also a choice. Not only may you purchase this policy on your own, but it also follows you no matter what position you end up in.

● Group disability insurance

You can enroll in coverage provided by your employer at work. The majority of employers who provide disability insurance cover all or part of the premium costs. Additionally, you can purchase disability insurance through your employer. Some employers provide disability insurance as a voluntarily available benefit but do not pay for it. As a result, employees can purchase insurance at a discounted rate from the employer’s insurance broker.

● Short term disability insurance

A percentage of your salary is paid to you by short-term disability insurance as soon as an accident or serious sickness prohibits you from working. We provide it to both employers and employees. You might be able to get this through your place of employment. Short-Term Disability policies – have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years.

● Long term disability insurance

A long-term injury is covered by long-term disability insurance as supplemental compensation. After your short-term insurance expires, it goes into effect. For businesses and their employees, they provide long-term coverage. Long-Term Disability policies – have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life.

● Supplemental disability insurance

You could choose to add additional coverage on top of your long-term or individual disability plan if you want more security. For workers and individuals who want to cover a bigger portion of their salary, bonuses, or commissions, supplemental disability insurance can be a terrific add-on. Even your employer may be able to help you obtain a policy.

Getting disability insurance

How much disability insurance do I need?

To start, calculate your monthly benefit payout using your income requirements as a guide. Then assess whether the disability insurance provided by your employer is adequate. Typically, 40 to 60 percent of your pre-disability wages would be covered. Through employment or independently, supplemental disability income insurance might provide coverage for a portion of income that basic insurance may not.

Finally, you get paid more the longer you are insured. In addition, certain careers have time restrictions. Most office workers up to the age of 65 are insured.

Disability insurance riders

When looking for long-term disability insurance, riders allow you to modify your coverage. You can determine when you get your disability payment, the definitions of coverage for your policy, and more by adding a disability rider. However, not all riders may be appropriate for everyone, and some riders may increase your insurance prices.

Non-cancellable, Guaranteed-renewable, Residual Benefits, and Future Benefits Increase are a few examples of riders.

Cost of disability insurance

If you don’t have access to disability insurance via your job, you may want to consider purchasing individual disability insurance. For wealthy earners searching for additional coverage, it is also a choice. This policy is not only available for independent purchase, but it also follows you from job to job.

Your final bill will depend on a number of things:

Age: Paying fewer premiums to achieve the payoff at a younger age results in cheaper payments and more financial leverage.
Your medical history and/or family history will affect the price.
Benefit amount: the cost will be relative to your current income
Benefit period: how long your insurance company will need to pay benefits
Elimination period: the time after becoming disabled that you start to receive benefits

How to purchase disability coverage

There are various types of disability insurance, some of which are offered by your company, some of which you must purchase on your own, and some of which are even supplied by the government.

All provide various levels of coverage and benefits for various circumstances. Which kind, though, is best for you and your family?

Employer-sponsored: Many businesses and other organizations want to take care of their workers, so they include disability insurance in their benefits packages. The cost of the benefit may be covered entirely or in part by the employer in specific situations.

For information about your company’s disability insurance policy or possibilities to acquire coverage from a group plan, speak with your human resources representative.

Individual disability insurance: Insurance providers offer private, long-term coverage to assist secure your income in the event that you get ill or injured and are unable to work (typically until age 65 or older). Get a disability income insurance quote right away.

Government disability: As part of the federal government’s Disability Benefit, Filipinos have access to government-provided disability, access to income security for this vulnerable group the Government of The Philippines provides a disability benefit administered by the national Social Security System (SSS). a person is considered disabled if their serious medical condition prevents them from working and has lasted or is anticipated to last at least a year or will cause their death.