What you need to know about disability insurance during a pandemic

If you have disability insurance through your job or have your own private policy, or you are thinking about getting one, here's what you should know about what's covered and what's not during this health crisis we are in.

Social distancing won't trigger disability insurance benefit

Even though disability insurance is meant to replace income when you are unable to work. Social distance quarantines don't cause policies to pay out unless you've been affected by the illness itself. If it's a social distance quarantine and it's forcing you out of work, that would not be a disability. There's has to be a medical limitation forcing you not to work to qualify you for disability insurance benefit.

Disability insurance does cover illnesses, and that includes COVID-19

Disability insurance isn't just for on-the-job injuries. In reality, illnesses represent 90% of all disability insurance claims. The coronavirus may be new to us, but it's considered a standard illness by insurance carriers if it puts you out of work for long enough.

There is no specific exclusion for coronavirus, but whether you're covered or not will be dependent on: What are the duties of your occupation? And if you contract the coronavirus, how does it affect your ability to complete your job duties.

Disability insurance policies have an elimination period — also called a waiting period — which is how long you have to wait before your benefits will start paying out. It's like a deductible on your health insurance or auto policy, but instead of money, it's time. Typical elimination periods range from 30 to 90 days. If your disability is going to last longer than your elimination period, as determined by your doctor, then you may qualify for benefits.

Review your policy so you know your benefit amount and elimination period. If you are in the market looking for one, this is the time to get it now. Despite the concern over COVID-19, rates have not gone up because it is still affecting a rather small percentage of the population. Lastly, disability insurance benefit amount is based on your income so if you don't make a lot or are self employed and write a lot of expenses off, you are not an ideal candidate and should not waste time looking into one.