Every working person faces the risk of disability, regardless of their occupation. And when you can’t work due to illness or injury, your income is also at risk.
Disability insurance is designed to replace a portion of your income when you’re too injured or sick to work. As a postal worker, you must understand the disability insurance options available through your federal benefits and third parties.
Read ahead to learn everything you need to know about disability insurance for postal workers.
What Is Disability Insurance?
Disability insurance or disability income insurance is a type of insurance product that provides an income if a policyholder can’t work or earn an income due to temporary or permanent disability.
While most people assume that disability insurance covers the medical portion of an illness or injury, it’s actually insurance for your income. No one knows when an unexpected illness or injury will occur, which is why disability insurance matters. Disability insurance protects you and your family from loss of income because of a disability.
How Disability Insurance Works
Unlike insurance products that protect against a specific loss, such as fire damage or theft, disability insurance compensation relates to the lost income caused by a disability. Essentially, the insurer agrees to pay you a monthly benefit if you become disabled and can’t earn an income.
Disability insurance aims to replace part of your monthly income when you can’t work because of an illness or injury. The disability income allows you to pay bills, buy groceries, and cover other expenses to support yourself and your family.
For example, if a postal worker earned $30,000 per year before becoming disabled, and if their disability prevented them from working, their disability insurance would compensate them for a portion of their lost income provided they qualify for short-term disability insurance or long-term disability coverage.
What Do Postal Employees Need to Know About Disability Insurance?
Unfortunately, postal employees don’t have a short-term disability plan from the federal government. While every postal employee has leave and disability retirement, these programs work as a base and may fall short of what you may need if you suffered a prolonged disability.
In practice, a postal worker must satisfy many conditions to receive these payments. This is particularly true regarding the Federal Disability Retirement USPS employees are entitled to under FERS (Federal Employee Retirement System.)
Disability retirement often involves you being unable to do almost any of your job duties, and the federal government requires you to apply for Social Security Disability as well. The process often takes several months for approval.
Third-party long-term and short-term disability insurance for postal workers fill in the gaps with your federal programs. They supplement rather than replace any of your current benefits.
Features of Disability Insurance
Whether you opt for long-term or short-term disability coverage, consider the following five factors in your decision-making process.
Like any other insurance product, you must pay a monthly premium to keep your disability policy active. The premium amount plays a significant role in deciding your coverage options.
Disability insurance plans pay out a percentage of the income you earned before you became disabled. The amount you can expect to receive will depend on the plan.
Long-term disability policies typically replace about 60% of your income if you can no longer work, while short-term disability policies typically replace 40% to 70% of your income for 13 to 26 weeks.
It’s important to note that the benefit from an individual disability policy is tax-free unless it’s paid from pre-tax dollars.
As regards the benefit period, some policies pay out a monthly benefit for a couple of months. Others pay out several years or until you reach a specific age.
Waiting Period for Benefits
The waiting period for disability insurance depends on the policy and the insurer. You want to know the waiting period because it lets you know the period of time within which you begin to receive benefits after experiencing a disability.
Also called the elimination period, the typical wait time for short-term disability cover is two weeks. Long-term disability policies have a longer elimination period of about 90 days.
Policy Definition of Disability
Some policies pay a monthly benefit if an illness or injury prevents you from discharging your normal occupational duties, but allows you to do other work. Other policies won’t pay a monthly benefit if you can still work.
Do I Need Disability Insurance?
If a sudden illness or injury that prevents you from working would adversely affect your income, then you should consider a disability insurance plan.
Frankly, every postal worker and just about anyone who earns a paycheck needs long-term and short-term disability insurance. It acts as financial protection for perhaps your most valuable asset — your ability to earn a living.
Postal Life and Disability Plans is a private insurance company offering unique disability and life insurance plans for postal employees in the United States. To learn more about benefits of having an insurance coverage as USPS employee, visit their website at https://postallifeanddisabilityplans.com/