Worker’s Comp and Disability Insurance: What You Need to Protect Your Income

Written By: Ashley Virnig, IDA Central Office Certification & Event Specialist

This article is a contribution on behalf of the IDA Health & Wellness Taskforce. Additional resources can be found here.

The financial impact of missing work due to illness or injury can be devastating. So how do you protect your assets when you are physically unable to work? The good news is that resources are available to help, but navigating your choices can be difficult. Different insurance agencies offer different options at many price points, so how do you decide what is right for you? When in doubt, it is never a bad idea to consult a financial advisor for guidance. However, knowing some of your options beforehand is a good start. So, what is Worker’s Compensation Insurance and Disability Insurance, and how can they help you get back on your feet?

Most states in the US require businesses to have Worker’s Compensation Insurance in case of on-the-job incidents. This insurance covers medical expenses and a portion of wages missed because of an injury or illness that occurred while working. It may also cover ongoing care/rehabilitation, retraining, compensation for permanent injuries, and/or payment to beneficiaries in the case of death — depending on the plan.

While you can rely on your employer’s insurance, you may also consider getting your own Disability Insurance. This insurance covers a portion of your income if an illness or injury prevents you from working — regardless of where it occurred. It ensures you will still receive some compensation even if the incident was not work-related. Having both types of insurance can also mean retaining a larger percentage of your income during periods of interrupted work.

It is important to have safety policies and training in place at work, but, while some incidents are preventable, others are not. There is no predicting when illnesses and injuries will take place, but you can have a plan in place to mitigate financial stress should one occur.

For more information, visit these resources:

• International information on disability laws and acts by country:
  • https://www.un.org/development/desa/disabilities/disability-laws-and-acts-by-country-area.html
• What is the difference between workers comp and disability insurance?
  • https://www.northwesternmutual.com/life-and-money/whats-the-difference-between-workers-comp-and-disability-insurance/
    
• How workers comp works:
  • https://www.forbes.com/advisor/business-insurance/workers-compensation-insurance/

 *The IDA is not a provider of medical or health services, and the information provided herein does not constitute medical advice. Please talk to your medical healthcare provider.