How to Buy Disability Coverage

2. On your own. Private disability coverage is typically based on your occupation, rather than your health or age. Buying your own policy includes two benefits:

• Portable coverage: Unlike a group plan, if you change ministries, you can take your private disability plan with you — and eliminate a coverage gap.
• Tax-free benefits: If you paid for your disability coverage with after-tax dollars, the benefits you receive if you become disabled will be tax-free.

What is the difference between short- and long-term disability?

• Short-term disability: Short-term disability supplements your compensation for a limited time when you are limited from performing the material and substantial duties of your regular occupation due to sickness or injury.

To qualify, the medical condition must occur off the job and prevent you from being able to perform your job responsibilities. Payments end when the policy’s benefits period ends, even if you’re still unable to work.

• Long-term disability: Suppose you’re still disabled after a time typically covered by a short-term disability policy. In that case, long-term disability can kick in to pay a portion of your income for longer. Depending on the policy terms, coverage could last for a few years — through retirement age or until you’re no longer disabled.

Short- and long-term policies are separate and must be purchased individually. You do not have to purchase short-term disability coverage to get a long-term disability policy.

How does disability coverage work?

It’s essential to understand how a policy works. Consider the following factors when making your selection.

• Own occupation vs. any occupation policies: In an “own occupation” policy, you are considered disabled if you cannot perform the duties of your current occupation due to a covered injury or illness. On the other hand, an “any occupation” policy will require you to find another job, possibly in another industry, that you can perform and will only consider you disabled if you can’t work at all.

• Elimination period — the waiting period for a disability policy: The elimination period is the time between your doctor declaring you disabled and your first benefit payment. This time period is based on the coverage designated in your plan. Think of your health plan’s deductible and rate — the higher the deductible, typically the lower the rate. With disability coverage, the longer the waiting period for your disability benefit, the lower your rate will typically be.

• Salary increase: Find a policy that will accept increases in your salary. Some policies will freeze your income level when you purchase the plan and not allow future increases. This could prevent a larger payout should you become disabled after a salary increase. Report any salary increases promptly to ensure you receive the appropriate benefits.

• Extra benefits: Some disability policies may offer extra benefits. For example, GuideStone^® offers:

• Survivor benefits: If you die after receiving benefits for 180 or more consecutive days, your survivor receives a lump sum payment of three times your last month’s gross disability benefit.
• Rehabilitation and Return to Work Program: To encourage individuals to return to work as soon as they become physically able, individuals receive an additional benefit for participating in a rehabilitation program.

Why does disability coverage matter?

One in four workers is likely to become disabled between the ages of 20 and normal retirement age.¹ It can be hard to imagine this many people experiencing some disability. How does this happen? Common causes include cancer, back pain, arthritis and mental health disorders.²

After considering how often disability can strike, you can take proactive steps to help guard yourself and your family from loss of income with disability coverage.

Fortify your steps by protecting your income.

Not sure how much disability coverage is best? Use our disability calculator to estimate how much you might need. Keep in mind that disability coverage pays a percentage of income — it’s not a full replacement of your salary. Plus, learn more about other coverages that can help protect your family.

At GuideStone, we are here to guide you along your journey to a strong financial future, fortifying your steps as you follow God wherever he leads. For more information about disability coverage, contact us at Insurance@GuideStone.org or 1-844-INS-GUIDE (1-888-467-4843), Monday through Friday, from 7 a.m. to 6 p.m. CT.

GuideStone welcomes the opportunity to share this general information. However, this article is not intended to be relied upon as legal advice.

²TheCDIA.org/common-causes-of-disability