Most people think about insuring their assets or valuables such as their home, car and jewelry, but never think to insure their most valuable asset, their ability to earn a living. Protecting your livelihood is more important than protecting your possessions yet most of us leave it to chance, go uncovered and hope a catastrophe doesn’t happen. Disability income insurance is insurance for yourself, it provides a source of replacement income if you become sick or injured and cannot work. Keep in mind that people who become disabled not only need to find an alternative source of income to provide for their families, but a disabling injury or illness usually leads to increased medical bills, possible modifications to your car or home and rehabilitation and many of these expenses are not covered by your health insurance. For these reasons and more everyone should consider disability insurance.
Even though some employers provide group disability insurance, there can still be a gap in coverage. You can bridge this gap by supplementing your group coverage with an individual policy. For example; typically group benefits begin after 90 days of a period of total or partial disability and can replace up to 60% of your salary to a maximum benefit of $4,000 to $5,000 a month. That will protect your salary up to $100,000 a year. However, if your compensation is greater than the maximum benefit amount will cover, and you could not afford the shortfall should you become disabled, you should consider supplementing your group coverage with an individual policy.
Most of us feel comfortable in knowing that we have group coverage and then fail to investigate the details of the contract leaving a greater potential to have inadequate protection. Some contracts for example only pay if you are totally disabled and pay nothing for partial disabilities, while others only pay benefits for 2 to 5 years. All good reasons to familiarize yourself with your group contract to help you determine if supplementing your group coverage makes good sense.
Advance planning is one of your most important tools when it comes implementing a disability protection strategy. Obviously, planning to purchase disability income protection after you suffer a loss of income due to an injury or illness is not a good plan, but planning for life events before they occur can insure that the protection is there when you need it. For example, if you’re covered by your company’s group disability plan but decide to go into business for yourself, you'll want to consider buying an individual policy before leaving your current employer because insurance companies are reluctant to issue a policy to someone with less than a two year track record.
Contact us to obtain more information or a quote for disability insurance.