what happens if you can't work?
how would you...
- make monthly mortgage or rent payments?
- make car payments?
- pay for food, utilities and other daily expenses?
- provide for your children’s education?
- save for the future?
Some questions to think about indeed. While it’s routine to insure your car, home, liability and often your life, it’s all too common that people don’t take steps to protect their income. One reason for this is that it’s something no one wants to think about happening. It’s also common for people to overestimate the relief that employer disability insurance or social security may provide.
A benefit of having your own disability insurance, in addition to any group disability income protection that your employer may provide, is that your own policy will follow you if you change jobs. An employer provided policy is cancelled when you leave the company. Also be sure not to confuse disability insurance with workers’ compensation protection that employers provide as they are different.
The best way to protect yourself and those who rely on you is to understand available disability insurance options and what protection you may already have before an accident or serious illness occurs and put a plan in place that can provide financial support. Your Murphy Insurance associate can assist you in reviewing what you already have and suggest ways to improve your protection. Email, call or visit us…don’t wait until something happens.
disability income insurance coverages and things to consider
Unlike workers’ compensation insurance, disability insurance generally covers you for injuries regardless of whether you are on or off the job and whether or not the cause is work related. After a specified initial “waiting” or “elimination” period after being disabled, disability income insurance pays a specific percentage of your income based on the amount of protection you’ve purchased. Typically, insurance companies provide coverage only up to 60% - 70% of your regular taxable income. When purchasing disability income protection, you will also determine what time period you want benefits to last.
It is important to be aware that pre-existing health conditions, your medical history and your age can affect the cost of insurance as well as your ability to qualify for long-term disability coverage. If you purchase disability insurance when you’re younger and healthy, you may be able to lock in your premiums, which tend to be lower.
Other issues to consider and understand:
- How does the policy define disability and are there exclusions?
- Does the policy cover both illness and accidents?
- Know how long the waiting period is? The longer the waiting period the lower the premium.
- Will my disability benefit amount adjust for inflation?
- Can you receive partial benefits if you can work but not full-time or at the same capacity?
- Will the disability insurance benefits impact other benefits such as social security, worker’s compensation, etc.?
- How long is the policy term and is it renewable without requiring a new medical exam?
- Will the premium be fixed or can it increase over time?