If you were asked what is disability insurance, would you be able to answer? Quite simply disability insurance protects your paycheck.
More of a definition would be, if you were to become injured or ill and can’t work, disability insurance pays a portion of your salary until you can return to work.
For most families, the thought of losing a few months worth of income or living on half a paycheck just isn’t an option. If you fall in that category you may want to consider disability insurance to protect you and your family.
A few disability insurance options include:
- Group Disability Plans. The most common kind of disability insurance, group plans are typically offered through your employer. The lowest tier of group coverage is extremely affordable, so that’s a big plus, but benefits vary greatly. Consider that group plans typically don’t come close to replacing your full paycheck, with a reimbursement rate of about 60% being typical. The issue with group plans is that they often place a monthly or yearly cap on the dollar amount you can be paid, or set a maximum time frame for benefits that could be as little as two years. Because of this, it’s important to read the fine print on group plans because they may not help much if illness strikes.
- Individual Disability Plans. If your employer doesn’t offer a group plan or you don’t like what you’re offered at the office, you can get your own disability insurance, which would be an individual disability plan. Keep in mind, without a group, your price is based on your unique situation and needs. Like health insurance, this means individual plans are generally cheaper if you’re young and healthy and costly if you’re old with heart trouble. But even so, shopping as an individual opens a wealth of options; such as coverage for lost bonus income above your salary, or, portability to keep the disability coverage even if you change jobs. If you have unique needs and are willing to shop around, an individual plan is worth pursuing.
- Supplemental Disability Plans. If you have a basic employer-sponsored disability plan then supplemental disability coverage is a decent and affordable bridge. As the name implies, it is an additional layer of coverage to help pay for medical or living expenses that may not be covered by a long-term plan. For instance, if you have an employer-sponsored group plan that pays just 60% of your paycheck, for a modest monthly fee you may be able to add on a supplemental policy to bring that amount up to 80%.
The bottom line is if you are unable to live without a paycheck how would you survive if something would happen to you? Contact me today and let’s talk about why is the best disability insurance for you.
Reference: Should you consider disability insurance, USA Today
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