Disability Insurance for Those Over 65: An Overview

Many seniors deal with severe disability, as people become more vulnerable to illness and accidents as they age. If you are below 65 years of age, disability insurance pays for some of your lost wages if you cannot do your regular work. The coverage provides monthly benefits until you turn 65, after which you can claim Social Security benefits. Here’s a closer look at the disability benefits that are available to Americans once they are over 65.

Age and Disability Risks

Research reveals that the chances of people becoming disabled rise when they get older. In fact, 44.6% of individuals between the ages of 65 and 74 suffer from some form of disability. Incidents and risks increase even more after age 75. So the need for disability insurance is clear since it pays you when you’re unable to work.

Earlier this century, a study by the Agency for Healthcare Research and Quality found that even though those above 65 made up 13%of the U.S. population, this age group accounted for 36% of healthcare expenses nationwide. Meanwhile, roughly a third of Americans with disabilities are 65 or over.

Disability insurance rates go up with age. Occupation and gender are a few other factors that affect monthly premiums, along with health status and coverage amounts. Statistics show women have greater chances of disability as they age, which is why they pay more for premiums than men.

Individuals can get the most benefits out of this insurance if they enroll at a young age. The longer you wait, the more you’ll pay in premiums. It helps to carry disability insurance for a benefit period of at least five years. Choosing the “lifetime” option allows you to collect benefits for as long as you’re disabled. You will continue to receive benefits after retirement age if you become disabled before age 60. Not all insurers offer this option, so your backup plan should be to find affordable disability insurance by the time you retire.

What Disability Insurance Covers

During your working years, disability insurance covers loss of income due to injury or illness. After you retire, you no longer need this specific coverage. Each insurer develops its own criteria for payment plans based on a percentage of your regular income. These insurance plans typically don’t pay 100% of all lost wages. The average rate of payout is between 60 to 70% of the average salary.

Another option for disabled seniors is Supplemental Security Income (SSI) if they live on limited income at age 65 and over. Some seniors may receive additional income if they qualify for federal and state financial assistance programs. Disabled Americans who already receive SSI benefits before retirement age automatically start to see retirement benefits once they turn 65.

Different types of disability coverage exist for different situations. Short-term disability coverage pays workers lost wages for a limited period, such as up to two years. Long-term disability policies deal with more restrictions and longer waiting periods up to 90 days before receiving benefits.

Due to a high number of claims each year, disability insurance is among the most expensive types of coverage. Since disability widely affects the elderly, insurance rates go up as people approach retirement age. Nevertheless, Americans with disabilities still have options. Contact our experts at Kneller Insurance Agency for more information on getting the right amount of disability coverage at rates you can afford.

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