What is Disability Insurance?
There are two main types of disability insurance. Short term disability policies can provide you a portion of your salary if you are unable to work for a “short period” - usually three to six months. Long term disability policies pay you a portion of your income if you are unable to work for a “long period”- usually three months or more.
of Social Security Disability Insurance claimants had their applications denied completely, even after appealing
of Americans would need to make major lifestyle changes if they lost part of their family income for three to six months
of annual bankruptcies on average are due to the
“illness or injury” of an individual or a family member
working adults in the United States are without disability insurance other than the basic coverage available through Social Security
'Definitions of Disability' vary among policies and providers. A person is considered disabled and unable to work if they are no longer able to perform the occupation they had prior to becoming disabled for a set period of time, or a person is considered disabled if they are unable to perform any job at all.
Common conditions that trigger disability payments are:
Musculoskeletal problems, such as back injuries, injuries and rheumatoid arthritis
Some types of Cancer diagnosis
Cardiovascular conditions, such as heart failure or coronary artery disease
Sensory issues, such as vision and hearing loss
Neurological disorders, such as Stroke, Epilepsy, or Parkinson's disease
Immune system disorders, such as HIV/AIDS, Lupus, or Multiple Sclerosis
Temporarily Replacing Lost Income
It happens every day. An unexpected injury or illness prevents someone from working — and earning the income they need to support themselves and their families. Sometimes this is just the first step on an anxiety-filled path that can threaten financial stability. Everything you have worked for could be lost because of a single event.
Most people consider their greatest asset to be their home or business, but it is not. Your single greatest asset is your own income, and ability to generate that income.
How can you protect your income, your family, yourself – and even your business? When you are unable to work, the last thing you want to worry about is where money is going to come from instead of focusing on your health so you can get better. If you are the primary income earner, then you are still responsible for payments for food, clothing, housing and a host of other things. Family members and friends may be able to contribute extra in times of need, but you probably don’t want to burden them unnecessarily.
How are you going to pay for what you need?
The single best way to protect yourself is with a disability insurance policy. The market offers a wide range of products that can replace lost income when you are unable to work. Most will require a health assessment to qualify. Variables include:
How much of your income will be replaced?
When will benefits begin?
How long will benefits be paid?
Whether benefits are taxable or tax exempt?
Whether benefits can be increased as your income increases?
Closely held businesses and business owners are especially vulnerable. Certain policies can actually help businesses keep their doors open in the event that a key rainmaker becomes disabled. Additionally, private policies typically replace more income over a longer period of time than standard group policies. These may be a good investment for high earners whose income extends beyond base salary.
NOTE: Many people are reliant on their employer provided group disability. Those policies often have coverage loopholes and policy language that favors the insurance company instead of you! For a review of your employer’s plan, contact us.