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Disability Insurance

Disability Insurance is the industry name for a plan that provides for periodic payments of benefits when a 

disabled insured is unable to work. The insurance product is designed to replace anywhere from 45 to 65% of your gross income on a tax-free basis should illness keep you from earning an income in your occupation. Every disability policy is different and should be assessed by the consumer based on the quality of plan created for the individual’s needs and not by the cheapest disability insurance policy on the market.

Many consumers do not plan for the possibility that they will be faced with a debilitating accident or illness during their working years. A professional with a family, for example, should consider disability insurance a necessity. For a consumer, it is not a required purchase like home owner’s insurance.

Individuals believe they may have disability coverage through their employer. This at times may be true, but the quality of coverage often leaves the disabled employee short of the protection he/she thought they had. We can assist the consumer with exploring the sources of income the consumer will need and have available during a disability.

 

Weigh Your Options

When evaluating disability income insurance policies, it’s helpful to consider the following.

·         Definition of disability. You can typically choose between “own occupation” coverage and “any occupation” coverage. With “any occupation” coverage, you can claim disability only if you are unable to perform any type of job. This type of coverage is generally less expensive than “own occupation” coverage.

·         Amount of monthly coverage. You can purchase disability insurance that will replace a certain percentage of your income —normally up to 50% or 60% of your pre-disability income. You should purchase coverage that will enable you to meet your monthly financial obligations.

·         Waiting period. The waiting period represents the amount of time that must pass between the date you become disabled and the date that disability income payments begin. The longer the waiting period, the less expensive coverage will be.

·         Benefit period. The benefit period can range from several months to life. The longer the benefit period, the higher the cost of insurance.

A disability income insurance policy could make the difference between financial security and financial hardship. Don’t wait to consider this protection until it’s too late.