The difference between Health Insurance and Disability Insurance
Health insurance and disability insurance are nothing alike. In fact, health insurance only pays for health related visits such as the cost of visiting a doctor or going into a hospital. However, disability insurance will pay for costs such as not being able to work due to a back injury. There are several other differences between health insurance and disability insurance.
Another major difference between the two types of insurance is that they each cost a large amount different from each other. For example, health insurance premiums can total hundreds of dollars per month for an individual. Some individuals have a large co-pay and deductible before the insurance plan will pick up the entire cost of their medical coverage. Disability insurance has nothing but a premium to pay each month. A deductible is in place but it is not in the equivalent of money. Individuals must wait through an elimination period where no benefits will be released. This period is generally 90 days long but can be altered upon the individuals choice. Shortening it will raise premiums while extending it will generally lower the premium that is paid.
Health insurance also covers doctors visits, hospital stays, medication costs, and any other medically related expense that you incur. The exact amount that is covered may vary. A high deductible, co-pays and other restrictions may apply to your coverage. Premiums are generally quite expensive with the best plans charging hundreds of dollars per month. This cost may be split between an individual and their employer or may be the entire burden of the individual.
Disability insurance only covers an individuals day to day expenses when they are disabled. Generally, 80% of an individuals working wages are paid or a set amount per month is paid. Benefits do not kick in automatically and require a waiting period known as an elimination period. Benefits only require that a monthly premium be paid and individuals often are able to change the elimination period. There are some circumstances where they will not be paid for their disability. Preexisting conditions, disability that occurs at work, conditions that are temporary and fraud are all reasons that disability insurance may not pay out. Generally disability insurance costs much less than any other type of insurance plan available. Many individuals choose disability insurance when they are younger because the cost is lower than when they age a few years older.