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Will disability insurance support you in a coronavirus quarantine?

As America’s economy is impacted by the threat of a coronavirus pandemic, people of every income level are looking for ways to safeguard their income and savings.

Medical professionals on the front lines are especially impacted because they must work knowing they could be exposed at any moment.

If you have a disability insurance policy, you may be wondering if it would cover you if you caught COVID-19 and were quarantined for two weeks or more to recover. Alternatively, you may not be sure you even have disability insurance to begin with, and you want to know if it’s worth investing now.

In this short article, we will help you address these common questions.

  • Does my disability insurance policy cover me if I get COVID-19?
  • Does my policy pay a benefit if I get quarantined and cannot work?
  • If my business closes because I or one of my employees gets COVID-19, will my business overhead expense (BOE) policy pay?
  • Can I buy short-term disability insurance to cover me if I get COVID-19?

Disability insurance’s coverage for Coronavirus and quarantine

Most disability insurance policies will pay a benefit if you cannot do your job due to any injury or illness. This includes viruses such as COVID-19.

Keep in mind that you must first reach the elimination period before any benefits will be paid and you must be unable to do your job due to the illness. If you are quarantined, this does not necessarily mean you are incapable of doing your job.

The elimination period is the waiting period before benefits begin, starting the day you become ill or injured. It is like a time-based deductible, and you can alter the cost of your policy by changing its elimination period.

In the case of coronavirus, the elimination period would begin the day you are tested and begin quarantine, not when the results come back.

The quarantine is a precautionary measure enforced by many state health departments and the CDC to prevent the spread of a virus during the contagious period. Symptoms during your quarantine may not be present or may be short-lived thereby not impacting your ability to work. Some people are also quarantined if they’ve been in contact with someone exposed to COVID-19; the quarantine itself does not deem someone to be disabled.

However, if you work in an industry where quarantine would restrict you from working, despite, no symptoms or mild or short-lived symptoms, being restricted from working due to the illness or exposure to the virus may make you eligible for coverage.

You can work with your human resources department and your group insurance provider to determine your eligibility for disability insurance benefits during quarantine. The language in short-term disability contracts can vary quite widely from what is normally see in the long-term disability space, and you will need a thorough review of your policy to truly understand what is covered.

Disability insurance for business closures

Some businesses have been forced to close their doors due to limitations imposed by the government to limit groups to 10 people or fewer.

If the business owner has a business overhead expense (BOE) policy and wants to have their overhead expenses covered, the same rules as above apply as do for personal disability insurance: You must personally have an illness or injury that prevents the owner from working, and you must meet the elimination period. If an employee is exposed or quarantine is enforced, this does not qualify the business owner for a benefit.

Short-term disability insurance for COVID-19

Is it worth it to buy a short-term disability policy to protect you from the financial effects of illness and quarantine? The same rules apply for all disability insurance use:

  • You must have an illness or injury preventing you from working.
  • You must meet the elimination period.
  • Being quarantined in and of itself does not affect your ability to work.

Many employees have short-term disability insurance through their employer, so purchasing additional coverage may not even be an option.

For those that do not have short-term coverage through work, it’s important to understand the risks and how benefits would be paid before purchasing private coverage.

Start by talking to your employer to identify what their guidelines are for exposure and how their group benefits would pay in these circumstances.

A disability insurance specialist can help you through this entire process, learning about your employer’s plan, analyzing the risks and benefits and selecting a solution that is suitable for your goals. North Star’s DI specialists are not tied to any disability insurance provider, so they can provide unbiased advice to guide you to an appropriate solution.

In conclusion:

Many of us have never seen a situation like the coronavirus has caused in our lifetime.

It is completely understandable to be concerned for your financial well-being right now and to look to any possible source of income to help you get by, as well as find measures to protect yourself should COVID-19 hit close to home.

An experienced financial advisor can have a sensible discussion of your options with you. Many have worked through other economic crises, and their goal is to bring peace of mind, not to lead you by fear.

As always, the North Star disability insurance team is dedicated to guiding all who are interested in these uncertain times.

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    Chase Brakke, CEPA®, DIA, DIF

    Author: Chase Brakke, CEPA®, DIA, DIF

    Chase leads our disability insurance, property and casualty insurance, and employee benefits divisions, ensuring clients have a customized protection strategy for their specific individual, family, and business needs.

    Chase is heavily involved in his community as a member of the board for BestPrep, a non-profit providing Minnesota students with financial literacy skills

    Registered Representative of Cetera Advisor Networks, LLC and Investment Advisor Representative of Cetera Investment Advisers, LLC.

    Securities offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Advisory Services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity.