Life insurance, health insurance, home and automobile insurance have all been designed to give us a modicum of peace of mind knowing that when these events strike, there is a level of protection that will minimize loss.
Unfortunately, there is one level of protection often over looked by many, Disability Insurance. What if you couldn’t work, how long could you sustain yourself or the loved ones who depend upon your income? Regardless of it’s source; accident, or genetic progression, current statistics reveal, there is a much higher risk of suffering through a long term job loss (over 90 days) due to an unexpected disability then there is in the risk of dying at a young age.
Without disability insurance, what may be available to help pay the bills?
Paid Leave – Accumulated time off, based on the company policy is good for the short term, but assumes the employee has banked enough days to remain at home with a full salary. This is a short term solution at best.
Workers Compensation – The average worker’s comp only pays a maximum of 60% of an individuals regular salary. Treatment and days needed to recover are all dictated by WC’s diagnosis. It’s also an “all or nothing” policy; if you try to work just a few hours a day to compensate for salary loss, all benefits will be revoked.
Emergency Savings – In today’s economy, few families have enough saved to cover all living expenses for longer than a month or two.
Auto Insurance – This is the most comprehensive coverage most people have in place, but limits coverage to auto accidents only.
Social Security – This is a long term coverage provided by the federal government. Unfortunately, more than half of those who apply for SS disability benefits are denied.
All of these options listed above are limited in coverage, it is for this reason Individual Disability Insurance may be more important than life insurance in that it protects every living member of the family.
Two Sources of Disability Insurance
Some companies include a level of provisional disability insurance in their benefits package. Before signing on the dotted line, investigate the specifics of the policy to be sure that it will provide an adequate level of coverage. The specific riders to look for:
What percentage of income will be covered? Policies can have benefit caps, such as monthly amount limits or number of months/years the disabled will be covered.
Who will be paying the premiums? Company policies are often less costly than private insurance options. If the company is offering a plan but requires employee to pay the premiums, depending on the terms, it could be a great discount that one should take advantage of.
What is the exact definition of “Disability”. Be sure the coverage is exhaustive enough to cover common conditions. Become familiar with the terms “own occupation”, “any occupation”, and “income replacement”.
A private policy is a good option if a company provides insufficient coverage or none at all. Private policies can be tricky, so look for these specific riders to be certain you are getting the coverage needed for you and your family. While shopping, keep in mind you will need to prove income level. Specifics to investigate:
Become familiar with these terms: Own Occupation, Any Occupation, Income Replacement
Waiting Period – Save money on premium payments by taking advantage of what is already in place, such as the sick leave, or an emergency fund. The longer you can delay activating the policy the less the premium payments will be.
Long Term Coverage – Look for a plan that will last until the age of 65 or to the age that Social Security payments will begin.
Part Time Work Provision – Be sure the policy allows for residual benefits or it will have the same “all or nothing” work policy. Any level of part time employment will render the policy void.
Other Important Riders to Consider
Cost Of Living Increases
Credibility of Insurance Company
Disability Insurance can provide another level of protection that is often overlooked. Without it, the added stress that comes from not having enough income to pay bills can impede the healing process making the situation worse. Consider putting a policy in place today.
Agents Information is the largest bank of Disability Insurance information in Atlanta Georgia. To get the information you need to pick the proper Disability Insurance plan.