|
|
DISABILITY INCOME REPLACEMENT INSURANCE 101
Choosing the "Right" Disability Income Replacement Insurance
The only thing worse than a long-term disability is living in a long-term disability situation with no income.
Buying long-term disability insurance is essential unless you are financially independent and your investment income will meet your month needs indefinitely. Or you have adequate group disability coverage through your employer. Many do not protect themselves from the long-term loss of income from illness or injury unless their employer provides the insurance - and many employers don't. Or you are self employed.
A balanced insurance program protects you in six ways from a major financial loss: lawsuits, destruction of home and personal property, major medical bills, premature death with dependents, long-term care, and long-term disability. Most carry insurance protection for the first four threats, but it is the rare person who carries privately held long-term disability insurance.
Consider: a person is three times more likely to become disabled for six months or more than to die prior to age 65. One in four bankruptcies and nearly 50% of all home foreclosures are caused by disability.
The economic loss to disability survivors is worse than it is with death because the disabled person still needs a roof over their head - and still has living expenses (groceries) and often needs additional care. So what should you consider when buying disability insurance?
A good long-term disability insurance program should enable you to live without making major life changes such as selling your house. Chances are you'll have to add personal resources to the monthly income your disability income replacement policy provides.
Becoming disabled is traumatic enough without having the added pain and stress of big changes in your lifestyle. Having the right amount of coverage is crucial. Too little coverage may mean that you still have to make major life changes in the aftermath of a disabling injury. Too much coverage and you're spending money unnecessarily.
Disability policies have hidden "traps" that must be avoided. "Elimination period;" "own occupation;" "residual;" "non-cancellable and guaranteed renewable;" "total disability;" benefit period;" "cost of living adjustment (COLA) rider;" "future purchase option;" all of these concepts must be understood when purchasing a disability policy.
The Fred Simmons Insurance Agency is ready to help you navigate your way through the disability insurance maze. We'll help you choose the right disability insurance coverage most suited for you. "Insurance of Value" - "smart" coverage for the "right" price - that's our goal for you!
|
