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Disability Income Insurance in Texas

Disability income insurance is designed to protect the income of a policyholder against financial loss that may arise due to the disability from occupational or non-occupational hazards. Apart from private marketplaces where you can buy policies to protect your earnings, the Texas Income Protection Plan (TIPP) also offers disability income insurance plans. The purpose of purchasing this policy is to provide protection for your income when you are not able to work. When an individual purchases disability income insurance in Texas, the person (the insured) will be entitled to a certain percentage of their income for a particular time-frame. The period during which a policyholder of disability income insurance will have access to a percentage of their income while they are not working is known as benefit period.

What is Considered Disability Income Insurance?

Any insurance policy that is aimed at protecting the income of an insured against total loss if such an individual cannot work because of a disability for some time is considered disability income insurance. Therefore, this form of insurance serves as an alternative source of income for a certain period.

What is the Purpose of Disability Income Insurance?

The purpose of disability income insurance is to serve as an alternative source of income for the person who purchases the policy when they cannot make their regular earnings as a result of one disability or the other. Although it does not provide the actual total earnings of the insured, it provides a significant percentage of the total earnings.

What is Disability Income Insurance for?

Disability income insurance is mainly for the income of a policyholder against complete loss if such a policyholder becomes disabled and cannot do what they normally do to earn money. When a policyholder of disability income insurance becomes disabled, disability income insurance helps them meet some, if not all, of their financial responsibilities not by being dependent on relatives but making use of disability income benefits.

What are the Types of Disability Income Insurance?

In Texas, there are 2 main types of disability income insurance:

  • short-term disability income insurance
  • long-term disability income insurance

Under short-term disability income insurance, the coverage is for 66% of the annual salary of the person who is insured and cannot work again or for some time as a result of any occupational or non-job related disability. This policy covers the earnings of the holder not for a long term but for a time-frame of not more than 5 months or 150 days.

Long-term disability income insurance, on the other hand, covers the policyholder for at least a year during which the policyholder cannot work. The holders of long-term disability income insurance policies are entitled to 60% of their yearly income from the insurer each year the benefit is active. This 60% of the annual salary will be spread over 12 months. The insurer stops paying the benefit when the insurer reaches the retirement age (maximum benefit period) or the insured is fit to start to work again.

Do You Need Disability Income Insurance in Texas?

It is good to obtain disability income insurance as it protects the policyholder when there is unforeseen circumstance that may force such an individual out of job. Although the insured will not be entitled to 100% of their monthly salary during their active employment, a reasonable percentage of their monthly gross salary is ascertained. When a policyholder can no longer work, the benefits that the policyholder receives monthly can be used to settle bills.

Although it is not mandatory to have disability income insurance in Texas, it is advisable to purchase it. Speak to a licensed Texas insurance agent to find out more.

Why Do You Need Disability Income Insurance?

You need disability income insurance because of the negative financial effects that disabilities can have on the earnings of people. According to the Social Security Act, there is a probability 1 out of every 4 people in their 20s will become disabled before they reach the retirement age. When these people become disabled and cannot work to make their regular incomes, disability income insurance provides a cushion for them to meet their financial obligations.

How Much Disability Income Insurance Do You Need in Texas?

Disability income insurance covers between 60 and 66% of your gross pay. Disability income insurance does not cover your total earnings but a minimum of 60% and a maximum of 66% of total earnings. Therefore, your disability income insurance should be between 60 and 66% of your total earnings. With this, you can be entitled to either 60 or 66% of your monthly earnings every month when you become disabled.

What Disability Income Insurance Coverage Do You Need in Texas?

What type of disability income insurance coverage you need in Texas depends on some factors. They are:

  • present monthly living cost,
  • how long you will enjoy the benefit,
  • your waiting period before you start receiving the disability income benefits,
  • how old you are at the time you decide to obtain the plan, and
  • the decision that your incapability can influence you to make concerning your job.

Your present monthly expenditures while you are actively working can influence how much coverage of disability income insurance you need. Whether 60% or 66% of your monthly gross earnings will be able to cater for your bills will also inform the riders you will attach to the plan.

How long you want to keep receiving insurance benefits is a factor that determines how much disability income insurance you need. A short-term plan provides 66% of the monthly earnings of the policyholder for at most 5 months; a long-term plan provides coverage for your earnings for a longer time-frame. The coverage can be for at least 12 months or till when you reach your age of retirement.

Concerning the waiting period, there are two options according to the duration of your plan. The waiting period for a long-term plan is 3 months while you wait for 1 month before you start receiving the insurance benefits for a short-term plan. If you can live off your savings or other sources of income for up to 3 months, the long-term disability income insurance coverage can be good for you. Otherwise, the short-term plan is advisable.

The age of an intending policyholder can determine how much disability income insurance coverage they need for their earnings. An individual who is close to the retirement age can go for a short-term disability income insurance plan. Disability income insurance stops being active once you reach the retirement age; therefore, a younger person can go for a long-term plan.

The decision your illness or incapability can influence you to make when there is a disability or illness which can affect your job and earnings determines the type of disability income plan to go for. If a policyholder can change their job if they are incapacitated to do their current job or some some jobs, they can sign up for a short-term disability income insurance. This insurance policy will provide some income for them until they get another job that their incapability will not stop them from doing.

To find out more about disability insurance - consult a Texas-licensed health insurance professional knowledgeable in this coverage.

Is Disability Income Insurance Required by Law in Texas?

No, the law in Texas does not mandate anyone to purchase disability income insurance. Some states mandate employers in the states to provide a short-term disability income insurance plan for their employees; employers in Texas can decide to provide the coverage or act otherwise. Residents of Texas can, out of their own volition, obtain any disability income insurance policies.

How Does Disability Income Insurance Work in Texas?

Disability income insurance prevents the earnings of the residents of Texas who buy the insurance from total loss should they be unable to work for some time.

To get disability income insurance, you have to be actively employed or have a regular source of income as self-employed. This is the first requirement. You cannot opt for disability income insurance when you become disabled and you need another source of income; therefore, your disability income insurance is purchased before you become disabled.

If you meet the requirements for purchasing the policy, you can either purchase it yourself or your employer offers to obtain it for their employees. When the employer does not provide it for their employees, you can purchase this policy from the market as an individual or through your professional associations. When you opt for getting individual disability income insurance, you can get it by approaching an insurer that sells the policy or speaking to a health insurance agent who can help you get the policy. If you choose to get group disability income insurance through your professional association, you stand to get it for a discount price because your association can use its numerical strength to bargain for discounts.

After you have purchased this insurance coverage, the insurer will cover between 60 and 66% of your monthly earnings depending on the coverage you purchased for a certain period of time. When you become disabled, you need to file for the disability benefits as your policy stipulates.

After filing for the benefits, the insurer evaluates your application vis-a-vis your medical report. Once your application is approved, you wait for a certain period (elimination period) before the insurer will start to pay you the benefits. The elimination period for short-term disability coverage in Texas is 30 days while for long-term coverage it is 90 days.

Once your insurer starts paying the disability benefits, you keep receiving 66% of your monthly gross income for at most 5 months if your coverage is short-term. If your coverage is long-term, your insurer pays your 60% of your regular monthly earnings every month for at least 12 months. It can even continue till you reach your retirement age.

What Does Disability Income Insurance Cover?

Disability income insurance in Texas covers the policyholder against loss of income because of an injury or a sickness. If a policyholder cannot work again or for a period of time, the insurer pays the policyholder monthly a certain percentage of their monthly earnings.

What is Disability Income Insurance Good for in Texas?

Disability income insurance is good for protecting the earnings of holders of disability income insurance. Purchasing the policy prevents policyholders from total financial loss at the time when they cannot work. The long-term disability income insurance policy protects 60% while a short-term policy protects 66% of the annual earnings of policyholders for a particular time. For instance, a policyholder of long-term disability income insurance whose yearly salary is $60,000 will be entitled to $3,000 monthly for a longer period, at least 12 months. If such an individual signs up for a short-term policy, they will be entitled to $3,300 monthly for at most 5 months. However, the benefit will reduce if the individual is receiving some other disability benefits such as worker’s compensation.

What Does Disability Income Insurance Typically Include in Texas?

In Texas, disability income insurance only covers the income of the policyholder against loss as a result of either job-related or non-job-related accidents. What disability income insurance includes varies from an insurer to an insurer. Some insurers include in their package waiver of premium, occupational rehabilitation, retirement protection, student loan protection, and unemployment premium suspension.

For a consultation and explanation of what disability income insurance is good for and covers or does not cover in Texas, contact a professional agent who can operate in the state of Texas.

Who is Covered by Disability Income Insurance in Texas?

Texas disability income insurance covers the insured individual’s earnings.

What Types of Items Does Disability Income Insurance Cover in Texas?

Disability income insurance mainly covers the earnings of an employee or a self-employed individual. It is expected that disability income insurance provides protection for a certain percentage of monthly income of an insured that could not work to make some money as a result of an impairment. However, there are some optional coverages that this type of insurance provides so as to meet the financial responsibilities of the policyholder.

Does Disability Income Insurance Cover Medical Expenses?

No, disability income insurance does not cover medical expenses in Texas even if the accident or sickness that causes the disability requires hospital visits or medical attention. Health insurance covers medical bills.

Does Disability Income Insurance Cover Mental Health?

Disability income insurance covers mental health. This does not mean that the disability income insurer will pay for the cost of taking care of one’s mental health. The insurer recognizes mental health as a disability which can stop one from working. When there is a case of mental health, you can file for the disability benefit.

Does Disability Income Insurance Cover COVID?

Yes, disability income insurance covers medical situations that are related to coronavirus. When you are down with COVID and you cannot work, your insurer will start paying you your monthly disability benefit after you have filed for it.

Does Disability Income Insurance Cover Pregnancy?

Yes, disability income insurance covers pregnancy. When you are pregnant and you cannot do what you normally do as your job to earn your income, disability income insurance provides coverage for your income.

Does Disability Income Insurance Cover Cancer?

Yes, disability income insurance covers cancer. While it does not cover the medical expenses of treating cancer, cancer is considered a disability that can stop you from working. The disability benefits that the insured receives, however, can be used by the insured to pay their medical expenses if their health insurance does not cover cancer..

What is Not Covered by Disability Income Insurance in Texas?

Not all situations that lead to incapability to work and earn some income** **are recognized in disability income insurance. Disability income insurance does not recognize disabilities that occur as a result of the following:

  • Act of war
  • Being an organ donor
  • Not following the prescribed treatment plan
  • Intoxication through alcohol or drug abuse
  • Being engaged in a felonious activity
  • Sickness or injuries from being in the armed forces
  • Self-inflicted injuries.

What is the Most Common Use of Disability Income Insurance in Texas?

Texas disability income insurance is used to protect the earnings of an individual from total loss. This is done so as to ensure that an individual who has the policy still has access to a significant portion of their earnings monthly when they are declared unfit to work.

What is the Difference Between Disability Income Insurance and Supplemental Security Income?

Although disability income insurance and Supplemental Security Income are for disabled people, there are still some differences. Supplemental Security Income provides some income to people who are disabled and from low-income families. Under SSI, the eligible people must be disabled and 65 years and above. Furthermore, some family members of beneficiaries of SSI can only enjoy some of the benefits it provides; on the other hand, disability income insurance does not give any benefit to the households of its holders. Also, to be eligible for SSI, a disability recognized by the program must have hindered you from working for at least one year.

Do I Need Disability Income Insurance if I Have Social Security Disability Income Insurance?

Yes, you need disability income insurance even if you have social security disability income. Social security disability income is an insurance program funded by the federal government to provide financial coverage for active employees that eventually become incapacitated and some of their households. Disability income insurance, especially short-term plans, tends to start catering for your financial obligations before you are eligible to start filing for SSDI.

However, your disability benefits from each of the two sources of income tend to reduce when you hold social security disability insurance with disability income insurance at the same time.

Who Can Get Disability Income Insurance in Texas?

Those people that are qualified to work in Texas can purchase disability income insurance in the state. Furthermore, the intending policyholder must not have reached their retirement age. Therefore, retirees are not eligible for the policy.

Who Qualifies for Disability Income Insurance in Texas?

People who are medically and physically fit to work and who are actively employed in Texas are qualified for disability income insurance.

Who Needs Disability Income Insurance in Texas?

In Texas, all employees or self-employed individuals that have either dangerous jobs or jobs which are not dangerous need disability income insurance. This gets their earnings covered if at all they become disabled as a result of an accident or sickness and they cannot work.

Who Should Get Disability Income Insurance in Texas?

You should get disability income insurance if you are employed or have a source of income and are worried about losing this source of income due to a disability.

Contact an insurance agent licensed to operate in Texas on clarifications on any questions about who can get, who needs, who qualifies and who should get Disability Income Insurance in Texas.

What are the Benefits of Disability Income Insurance in Texas?

When a Texas resident becomes disabled and unable to work, the disability income insurance benefit helps by replacing up to 2/3rds of the insured’s income.

Why is Disability Income Insurance Good?

Disability income insurance is good as it serves as another source of income for individuals who purchase the plan when they are not able to work as a result of sickness or injuries. Policyholders who eventually become unfit to work can still receive between 60% and 66% of their monthly salary for a period of five months or more than five months depending on the coverage they purchased.

Why is Disability Income Insurance Bad?

If the holder of the policy dies, none of their family members can file a claim to get the benefits. Also, the disability benefit is tied to being unfit to work as a result of accident or sickness. There is nothing like death benefits as in life insurance.

For a free consultation and explanation on the importance of having disability income insurance in Texas, contact an agent who is licensed to operate in the state.

Is Disability Income Insurance Worth it in Texas?

Yes, purchasing disability income insurance is worth it in Texas. Uncertainties can happen and anybody can become incapacitated or unfit to work for some time. This insurance prevents policyholders from financial hardships which they may face when there is no income because of sickness or injury. Statistically, it is claimed that more than 70 percent of American residents cannot survive more than one month if their monthly salaries stop coming. Disability income insurance ameliorates financial hardships on policyholders by providing 60% to 66% of their monthly earnings for some time.

What Happens if You Don’t Have Disability Income Insurance?

If you do not have personal disability income insurance and you are not entitled to SSI and SSDI, there is no other source of income for you when you cannot work to make some earnings.

Why is Disability Income Insurance Important?

Disability income insurance is important because it provides coverage for some portions of the earnings of the policyholder. By doing this, disability income insurance prevents policyholders from being completely dependent on other people when they cannot work and earn their regular income from their job.

What Happens When Your Disability Income Insurance Lapses?

Your disability income insurance lapses if you do not pay your premiums and you fail to pay them during the grace period. When it lapses, your monthly earnings will no longer be protected. If there is an unforeseen occurrence which hinders you from working and getting some income regularly as usual, you will not be able to file a claim for what should have been your monthly disability benefit.

To learn more about disability income insurance, contact a licensed Texas insurance agent. MOST IMPORTANT: Try to avoid lapses of coverage.