Disability insurance
Forty-three percent of
all people age 40 will have a long-term (lasting 90 days or more) disability
event by age 65. It may be difficult to imagine becoming disabled and
unable to work due to accident or illnessbut it's easy to picture the
consequences.
Nobody plans on not being able to earn a living. How quickly
would your resources become depleted without a steady income? Imagine
being unable to meet monthly expenses, pay your rent or mortgage, and afford the
basic necessities? As the disability lingers on, financial needs only become
greater and less manageable. What would you do?
Most employers provide short-term sick leave and some may even
provide benefits covering up to 60 percent of your salary should you become
disabled. These benefits usually last from five years or to age 65. Social
Security Disability benefits can be paid to workers whose disability is expected
to last at least 12 months and is so severe that no gainful employment can be
performed. Social Security benefits are not automatic, have stringent guidelines
and may require legal assistance to obtain.
Other limited replacement income is available for workers under
some circumstances from workers compensation (if the injury or illness is
job-related), auto insurance (if disability results from an auto accident) and
the Department of Veterans Affairs if eligible.
If you are self employed, some of these options may not even be
available to you. Disability Insurance policy designed to complement your health
insurance plan and replace a portion of lost income should you be unable to work
due to accident or illness. When you pay the premiums yourself, disability
benefits are not taxed. (Benefits from employer-paid policies are subject to
income tax.)
There are two types of disability policies: Short-Term Disability
(STD) and Long-Term Disability (LTD):
Short-Term Disability
policies (STD) have a waiting
period of 0 to 14 days with a maximum benefit period of no longer than two
years,
Long-Term
Disability policies (LTD) have a waiting period of several weeks to
several months with a maximum benefit period ranging from a few years to the
rest of your life.
There are several ways to save money when purchasing a Disability
policy, including options for longer waiting periods before benefits begin and a
shorter benefit period. But keep in mind, you might save money on premiums, but
you could be without coverage when you need it most. Disability of long duration
poses the greatest financial hardship.
If you are considering a Disability Insurance policy it is integral
to understand all of the aspects of Disability policies, the difference between
protection features and the many options which should be measured when
purchasing a policy. For instance, there are two very different definitions of
disability used in Disability insurance policies; the Time & Duties method
and Recovery & Residual benefit. It is important to understand the
explanation between them and have a clear understanding of the specifics of any
Disability policy.
Affordable Insurance Pro can assist you in making
sure you purchase the Disability Insurance policy that is the right solution for
you.
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