Understanding Disability Insurance for Federal Employees: How Does It Work?

Today, due to the rising medical costs and lack of emergency savings, many workers lack adequate disability insurance. Without sufficient income protection, many workers would fall into hard times if they cannot work due to injury, illness, or pregnancy-related disability. Therefore, disability insurance for federal employees is invaluable in careers in high-stress and high-risk. Here’s more detailed information on this topic.

The Basics of Disability Insurance

Disability insurance offers income protection to those who can’t work and earn an income because of a disability. So, your disability insurance policy will protect you from financial losses if an illness or an accident renders you incapable of working and earning your regular income. You can get disability insurance through social security, insurance companies, or an employer. The two main types of disability insurance include:

  • Short-Term Disability Policies – Have a 0-14 day waiting period, and the benefit period doesn’t exceed two years.
  • Long-Term Disability Policies – The waiting period can be up to several months, and the benefit period ranges from a couple of years to until you pass away

Why Is Disability Insurance Important?

Many people wrongly assume that “disability” only applies to devastating conditions such as deliberating stroke or paralysis resulting from an auto accident. However, many disabilities are due to common illnesses and less severe injuries such as pregnancy and depression. According to the Council for Disability Awareness (CDA), the common causes of short-term disability include:

  • Pregnancies – 22.3%
  • Musculoskeletal disorders that affect body parts such as knees, hips, shoulders, and spine – 18.5%
  • Injuries such as strains of ligaments and muscles, fractures, and sprains – 11.4%
  • Digestive disorders such as gastritis and hernias – 7.4%
  • Mental health issues such as anxiety and depression – 7.3%

On the other hand, the common causes of long-term disability include:

  • Musculoskeletal disorders – 27.6%
  • Cancer – 15%
  • Injuries – 12%
  • Mental health issues – 9.3%
  • Circulatory problems (stroke, heart attack) – 8.2%

Disabilities can disrupt your ability to get an income and consequently your ability to pay your bills, provide for your family, and maintain your standard of living. Up to 43% of today’s 40-year-olds will develop long-term disabilities by the time they are 65 years old. Moreover, about a quarter of Americans aged 20 years today will suffer a long-term disability before hitting retirement age (65 years). Disability insurance can help you mitigate the financial losses from accidents or illnesses that lead to short-term or long-term disabilities.

Disability insurance is especially vital for federal employees in high-stress and high-risk careers where the risks of disability and injury are higher. Examples of such professions include the U.S. Marshals Service, FBI (Federal Bureau of Investigation), and DEA (Drug Enforcement Agency). For federal employees, while both FERS (Federal Employee Retirement System) and SSDI (Social Security Disability Insurance) can provide benefits if you’re unable to work, they often only offer short-term benefits and are subject to taxation. Disability insurance will cover the gaps in coverage. However, it is essential to note that disability insurance typically replaces up to 65% of the policyholder’s pre-injury gross income.

Federal Disability Insurance Benefits

  • It covers up to 60% of your gross monthly income
  • Guaranteed issued
  • If you’re a federal employee, your coverage limit is $3,000
  • If you’re a postal employee, your coverage limit is $2,000
  • If qualified, you can get up to $5,000 in coverage
  • It covers both work-related and personal injury, illness, and disability (including maternity)
  • For each incident, you can get monthly benefits for 12 months
  • You can use it in addition to sick leave
  • Payroll deduction

If you’re a federal employee, contact Premier Protection today for an income replacement program that will provide you with sufficient financial protection in case of disability and thus enable you to focus on recovery.

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