Tag Archives: Disability Insurance

On the Road to Recovery: The Importance of Disability Insurance

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On the Road to Recovery: The Importance of Disability Insurance on avanteinsurance.com

Understand your individual risk level to make a smart and informed choice about the best policy for you and your loved ones

Homeowner’s insurance. Life insurance. Hurricane insurance. When we think of insurance, these are the kind of policies that usually come to mind. Rarely, if ever, do people think of disability insurance. Perhaps that’s because the chance of a healthy adult getting a serious, multi-year disability is relatively small. However, despite the small chances, the consequences for the individual and his or her family in the wake of a disability can be enormous– especially if the disability permanently affects their ability to succeed in their career.

Thinking about the potential outcome of a serious accident can easily change one’s opinion about the importance of disability insurance. Perhaps that’s why so many younger people– especially young parents– are realizing that for them, getting disability insurance isn’t a farfetched notion. Instead, it could be an essential way for them to help guarantee their family’s financial security in the case of an unlikely but devastating crisis.

Look at several factors to determine your personal risk level

While disability insurance can be a great tool for many people, you still don’t want to purchase a policy unless you really need it. That’s why you should take a look at multiple factors– including your age, medical condition, current and future career options, expenses, assets, and dependents to determine if you need disability insurance, and if you do, how much.

• Age: Individuals under the age of 30 or 40 are less likely to get injured or disabled from a disease

• Medical condition: If you have no known medical conditions, and your immediate family is relatively free of genetic and inherited diseases, you’re less likely to need insurance. If many conditions run in the family, you should probably consider it.

• Current and future career: What is the injury and/or disability rate for your job? Even if it’s very low, could an off-the-job accident easily affect your ability to do your job well? Does your job require running, great physical dexterity, or other skills that a disabled individual may not have?

• Expenses: How much does it cost per month for you to maintain your current (or similar) lifestyle? How much is that amount likely to increase in the future? How much could your medical costs amount to if you got into an accident?

• Assets: With the amount of money you currently have saved, how long could you support yourself and your family without your job? What assets could you sell to help support you and your family during this period?

• Dependents: How many children under 18 do you have right now? If you have 18+ kids, will you be paying college tuition and other expenses for them? Do you have any parents, in-laws or older family members that you support financially? Do you expect any of this to change soon? Usually, it’s much more important for parents with young children to get disability coverage, as child care expenses are often high and it may be difficult to afford them without an income.

Choose carefully, disability insurance can be somewhat pricey

Expense is yet another reason why disability insurance may be relatively unpopular when compared to other forms of insurance. Unfortunately, in many cases, some forms of disability insurance are nearly 100x more expensive (for the same amount of coverage) than the average life insurance policy. Why so pricey? Well, the number of people purchasing disability insurance is still small– and insurers need to effectively spread risk over a large population to get their money back. So, to compensate for the extra risk, prices often are increased.

Plus, people who know they’ll need disability insurance (manual laborers, people with genetic predispositions to diseases) are more likely to buy it, which raises prices for everyone when they cash in on their policy.

Employer vs. private insurance policies and regular vs. additional policies

A lot of disability insurance policies are purchased through an individual’s employer. For people who have this option, disability insurance is significantly (often around 3-4x) less expensive– so if you want disability insurance and think your employer might offer an option, you should take the time to check.

It’s also important to note that most policies do not pay more than 50-60% of an individual’s salary, so you if you feel you need 100% salary coverage, you’ll likely have to pay an additional overcharge. Much like the market for disability insurance itself, the market for full salary coverage policies is incredibly small– and most people who purchase them expect to get injured, which makes 100% coverage policies quite expensive.

Understanding disability insurance waiting periods can save you serious hassles

Most disability insurance policies have waiting period of either 90 or 180 days (around 3 or 6 months.) This helps keep costs down by reducing the number of claims for short-lived or non-serious injuries. Due to their greater potential monetary value and improved flexibility, 90 day-wait plans are more expensive than their 180 day-wait counterparts.

When it comes to disability insurance, make a smart choice for your individual situation

With one in four adults becoming disabled before the age of 67, everyone should at least think about getting disability insurance– but the amount and type of coverage should be uniquely tailored to individual’s wants and needs. Even if you think you’re too young to worry about a disability (and, if you’re single and in your 20s, you just might be) it can’t hurt to learn a little bit more about your options down the line.

Want more information about how different types of insurance may be able to help you and your family? Avante Insurance can educate you on various types of insurances that can suit your family’s needs.

Disability Insurance: Why You Need It

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Disability Insurance: Why You Need It on avanteinsurance.com

What would you do if you weren’t able to go back to work for several months?

By the time you reach the age of 35, you have a one-in-three chance of becoming disabled for more than 90 days during the rest of your working life. That’s a stat no one should ignore. And while you may be thinking that you’re young and healthy, the reality is that accidents happen and no one is immune to them. For many folks, the term disability is something they feel doesn’t apply to them. But if you think about what would happen if you were injured or became ill and couldn’t work for a significant length of time, you may reconsider. No matter how old you are, disability insurance is something everyone needs.

What is disability insurance?

Disability insurance was created to protect your financial well-being in the event that you are forced to lose wages due to an injury or illness. With a disability policy, you’ll receive benefits to help you continue to paying bills and managing life. Many companies offer disability insurance to their employees, but if yours doesn’t, then it’s important to take steps on your own to ensure that you’re covered. There are two different types of disability coverage:

Short Term Disability

Just like its name suggests, this type of disability insurance will provide coverage for a limited amount of time. There’s usually a short waiting period after you become ill or injured, then you begin receiving benefits for a length of time specified in your policy. Short Term Disability policies often have a specified maximum coverage amount which means that you will receive payments until you reach the time limit, hit the maximum amount, or you recover from your illness or injury. Some of the events that are covered include:

• Injury or illness that did not occur on the job (covered by worker’s compensation)

• Pregnancy

• Surgeries

Long Term Disability

This type of policy differs from short term in a few ways. The first is that the waiting period to begin receiving benefits is often longer (up to 90 days). And unlike short term disability, pregnancy is not covered. Long term disability provides much-needed benefits to you when you have suffered a debilitating injury or illness that prevents you from working for an extended period of time or, in some cases, for the rest of your life. Depending on the policy specifications, coverage can be for several years, until reaching retirement age, until recovery, or for the rest of your life.

Some of the events that Long Term Disability covers include:

• Back injuries

• Osteoarthritis

• Cancer

• Heart Attacks, coronary artery disease

• Mental illness

Why you need disability coverage

For most folks, not being able to work for long periods of time means losing viable income that’s essential for survival. Without a regular paycheck, not many people would be able to afford a mortgage, food, utilities, and car payments. And while many younger workers may believe that disability insurance is something reserved for older generations, the opposite is actually true. The younger you are, the less likely it is that you’ve amassed a large amount of savings or assets that you could turn to in the event that you’re unable to work. Add to that the fact that if you are injured or become ill, you may have additional expenses related to your condition.

Disability insurance can give you the peace of mind that if you become unable to work because of injury or illness, you will still have a regular income supporting you. Find out more about the different types of disability policies available by getting in touch with us today.