The American Council of Live Insurers estimates that one third of all adults between the ages of 35 and 65 become disabled for a period of 90 days or more, and one in seven workers will become disabled for more than five years.
Can you afford to live and take care of your family for 3 months or 5 years without income? Probably not! Many people wrongly believe that long-term disability is usually a result of a major accident or some rare cause, but the reality is, most adults become unable to work due to illnesses like heart disease or cancer.
Becoming disabled or otherwise unable to go to work causes a loss of income so devastating to most families that it is the reason for 46% of all home foreclosures, according to statistics provided by the US Department of Housing and Urban Development.
What is Disability Insurance?
Disability insurance provides coverage for when you are unable to work due to injury or illness. It will replace a portion of your income if you become disabled and cannot work. Many employers offer group disability insurance policies, and will generally replace 60% of your current salary. You can purchase a supplemental individual disability insurance policy to cover up to 70% or 80% of your salary. If you pay for your disability insurance yourself (your employer does not pay for it) it is tax-free.
Employer-Offered Group Disability Insurance
Around half or more of all medium to large sized businesses offer long term disability insurance. Even if you are lucky and have the policy, you might consider purchasing a supplemental plan to increase the percentage of income you can receive under the policy if you ever need to use it.
Group plans will insure your regular salary- never bonus amounts, and there is a benefit cap of $60,000 per year. The amount you receive is also reduced based on other benefits you might receive, like social security benefits. If you make a decent income in terms of "bonuses" or earn a salary in the six digits- you're going to want to consider purchasing supplemental disability insurance to increase the amount you'd receive if you need to claim.
Individual Disability Insurance
For individuals who are self employed or who want to supplement the coverage they receive under their employers group disability insurance plan, you can purchase your own disability insurance. For high salary earners, you can get coverage to provide a percentage of the higher earnings and bonuses, as well.
Selecting & Buying Disability Insurance Policies
Purchasing an individual disability insurance policy can be complicated and somewhat expensive, similar to life insurance. Policy prices are based on a wide range of factors, including age, gender, health status, and the amount of coverage desired. Certain employment raises the premiums as well.
Buying the right type of disability insurance is important, since it's going to cost you money and you want to make sure you receive the highest level of benefits possible if you ever need to make use of the policy.
The longer the "waiting period" for benefits to kick in, the lower your premium. If you choose benefits that will be paid within 30 days of becoming sick or injured, you'll pay higher than policies that have you wait 120 days for benefits.
Disability insurance has various riders that you must select when buying a policy. One that you will want to be sure to include is the "own occupation" coverage rider. This rider provides benefits if you are unable to perform your exact job you held before you became disabled. While including this may cost you an additional 40%, it's well worth the money if you should need to use your disability insurance.
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I've been dismissed from bankruptcy earlier this ...
By: Michele | 10-09-2008
I've been dismissed from bankruptcy earlier this year. I have received a letter from my mortgage company about foreclosure on my home beacuse of missed payments to them during the bankruptcy. The total $$ is way out of reach for me at this time. Is there anything I can do to save my home??
Accidental Death Insurance Coverage
By: DonnaCliveops | 10-09-2008
Hello Jonathan Berr
My question is on Accidental Death Insurance Coverage. I am a wife and mother,54yrs,son is 14yrs,husband is 52yrs old, a stay at home mom.
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Did I make the right choice in choosing this type of coverage which is underwritten by Monumental Life Insurance Comp., Balti.Maryland. Is there a better route to take, and most importantly, can you tell me your view point on this type of insurance?
Thanking You inadvance
The Crowley Family
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My now ex-husband and I filed a chapter 13 in the State of Oregon that was discharged (paid in full) in approximately 2004. I need to know when I will be able to file a Chapter 7 as after our divorce my credit has once again been ruined. I am now in the state of Idaho.
Can I lose my house in Michagain Bankruptcy
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