Do You Have Enough Disability Insurance
What is your most valuable asset? Most people will say its their house
, or their car, but not many consider their income to be their most valuable asset, and yet without an income none of us would be able to make payments on a house or a car. So just like we insure our home, and our car, we should protect our income with disability insurance. Disability insurance will provide you with 65 to 70 percent of your income when you suffer from a disability due to an illness or an accident. Its an important safety net and yet one which is very often neglected.People who suffer from a disability will tell you how easily and quickly the cost of recuperating at home can eat into your life savings. While your medical or health insurance will cover costs of surgery, or in-patient health care services, it will not cover costs of medication and therapy when you are at home recuperating from an illness or accident. Nor will it replace income lost due to absence from work.
Is your workplace disability insurance enough?
According to Americas Health Insurance Plans, about 50 percent of middle and large-sized companies offer long term disability benefits that last for at least five years. However, with the slump in economy, companies are trimming the benefits of the disability policies they offer.
Take a good look at the policy.
Employers generally insure against accidents that occur at the workplace or are job-related, thus limiting the scope of coverage. Statistics show that the majority of disabilities are not job-related.
Workplace disability insurance is subject to change any time. Your employer can either reduce the benefits or change the features of the policy at any time without notification.
What percentage of income does your workplace disability insurance policy provide as benefits? Does your workplace disability insurance give you the maximum coverage?
If your workplace disability insurance provides 40 to 60 percent of your income and you are used to using 100 percent of your income, then you may find yourself struggling to make ends meet. Without a steady flow of income, the only way you may be able to meet living expenses is by using up your life savings. This kind of distressing situation has forced people to foreclose on their home, or go bankrupt. Buying a supplementary individual disability insurance policy can add an extra 10 or 20 percent to your workplace disability benefits, and would help to ensure you have adequate finances while you recuperate at home.
Why buy an individual disability insurance policy?
Protecting your income is vital.
Workplace disability insurance is lost once you leave the job.
About 33 percent of all American workers will suffer from a disability at some point in their lives leaving them disabled for more than 90 days, according to a 2009 estimate from the Social Security Administration.
Although these statistics should prompt workers to buy disability insurance, about 70 percent of employees aren't covered by private long-term disability insurance. Social Security disability benefits may payout only 40 percent of a person's income, and its hard to get.
Contrary to what most people think, long term absence from work because of a disability occurs from an illness, such as cancer or heart disease, and not an accident or work-related injury.
Doctors today are able to prolong life through advanced treatment, but such treatment requires longer recuperative periods or may leave you with a temporary or long term disability.
Getting affordable disability insurance
There are ways to work around the cost so that you get enough coverage to meet your needs at an affordable price. Premiums will vary depending on your personal needs and the benefits you choose. Underwriters also take into consideration your health profile, age, occupation, etc. The two modifiable factors that determine your premium ratings are: the elimination period and the benefits period. The elimination period is the amount of time that passes from the time a disability has taken place and the time you start receiving disability benefits. The benefits period is the duration of time the insurance company will pay you benefits. You can increase/decrease your premiums depending on these two modifiable factors.
In general, premium costs can be reduced by keeping a longer elimination period and reducing the benefits period. Its something to consider when youre trying to determine the best coverage at an affordable premium. Dont let the high cost of disability insurance deter you from buying this much-needed policy.
Finding the cheapest disability insurance
Compare disability insurance quotes from several top-rated insurance companies. Disability insurance policies define disability in different ways and therefore policies will vary. Shopping around will give you the best rates and a wider selection of options.
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