Is there a difference between workers' compensation and disability insurance? We all want to work and make money for a while and then retire at a good age. When we are old, we wish to have enough cash or a business to cater to our needs without being a liability. However, this isn't always the case. At any point, business owners and workers may suffer a work-related injury or illness. Such damage may inhibit working ability.
So, it's wise for working-age adults to have a financial plan. A plan can protect you whenever you can't continue working. Two of such financial programs are workers' compensation and disability insurance. These insurance options protect workers' income if they can no longer work.
They are similar in effects, so many people confuse the two. This article will point out the differences between them. If you have suffered a work injury, it would be best to contact a workers' compensation attorney to help you get compensation.
What Is Workers' Compensation?
In Alabama, as in many American states, the law requires that employers take out workers' comp insurance for their employees. This insurance provides a safety net for employees who can't work. The defining feature of workers' comp is that it covers ONLY work-related injuries or illnesses.
Therefore, if an employee suffers an injury on their own time, they won't be eligible for benefits. This is also the case where your working conditions didn't cause your illness. Finally, if you were working but not doing the company's business at the time of injury, you might also lose your right to benefits.
Furthermore, since workers' comp is mandated by law, employers who don't have this insurance may face sanctions. Typical workers' compensation benefits will provide:
- Medical expenses
- Lost wages of up to two-thirds
After getting injured on the job, you'll have to report your injury to your employer. After registering your work accident, your employer usually starts paying you benefits.
What Is Disability Insurance?
Disability insurance is another type of insurance an individual can purchase. It also replaces part of your income if you can't continue working. Disability insurance's primary distinction is the fact that it doesn't cover only work-related injuries or illnesses. Instead, you can access disability insurance coverage both for on and off-the-job injuries that prevent you from working.
Furthermore, individuals primarily take out disability insurance themselves. Your insurance policy determines how much of your income the insurer pays you. This is unlike workers' compensation, where the law usually specifies the amount your employer pays you. With disability insurance, you can get up to 50% – 60% of your income.
Types of Disability Insurance
There are different types of insurance. Some of them are:
Short-Term Disability Coverage (STD)
Short-term disability insurance applies where the injury doesn't keep you away from work for long. It could be that the injury or illness isn't very severe. STD coverage typically begins after 1-30 days of the wound. You can continue receiving payments until you're medically fit to return to work or after 90 days.
Long-Term Disability Coverage (LTD)
Long-term disability kicks in when your injury or illness is severe enough to prevent you from working for a long time. Therefore, LTD payments often start coming in later than STD takes. Long-term disability payments begin after 60 or 90 days. Furthermore, you can continue receiving benefits until your doctor clears you for work.
Workers' Compensation v. Disability Insurance: Which Should I Get?
Knowing that workers' comp is different from disability insurance, you may be wondering which you should choose over the other. However, both aren't at odds with each other. Workers' comp can protect your income when you suffer work-related injuries, while disability income offers you broader coverage.
Both insurance types can even run concurrently depending on the terms. Therefore, it would help if you had both workers' compensation and disability insurance. This way, you can receive higher benefits if you're ever unable to work.
You can't choose whether or not to have workers' comp insurance because it's an obligation the law places on your employer. However, you can choose to add disability insurance to your financial plan. If you're uncertain as to what choice to make, you can speak to a financial advisor.
Alabama's Best Workers' Comp Attorneys Can Represent You
Suffering a workplace injury or illness can be incredibly devastating. However, you shouldn't go through this alone or even pay for your treatment if you have a lawyer. Alabama's workers' compensation attorneys can help you make your claim for workers' comp benefits.
Our lawyers have combined years of experience winning workers' comp benefits for Alabama employees. We're confident that we can win your case too. So, why not call us today for a FREE consultation on your case.