22 Oct Do I Need Disability Insurance?
Maybe you’re one of the lucky ones who only miss work a few days a year because of a bad case of a cold or flu. You’d never be out for an extended period of time, right? Well, according to the Social Security Administration, a 20-year-old entering the workforce has a one in four chance of becoming disabled before reaching retirement. The majority of these cases are for illness, not injury. Cancer, multiple sclerosis, and other health issues are behind 96% of missed work.
No one wants to think about this, however, if an illness or injury prevents you from working and you have no income coming in how will you afford to pay your mortgage or buy groceries? Here a few questions that reveal how disability insurance could help when you need it most.
What does disability insurance cover?
Think of all of the monthly expenses you take for granted because they are paid by your income: mortgage, healthcare costs, daycare, or household bills. Disability insurance helps maintain your household giving you time to heal as you handle a medical challenge before you retire or reach age 65. You usually get paid a fixed amount based on your income on a regular basis.
How much disability insurance do I need?
If you already have group long-term disability (LTD) insurance through work, it’s probably not enough to cover your monthly necessities. Ask your HR rep about this. But most LTD will cover about 60% of your income; that equals significantly less take-home pay after taxes—down to about 40-50% of your income. Supplemental disability insurance could help replace more of your monthly income to keep you solvent and stable.
How much does disability insurance cost?
Disability insurance typically costs 1- 3% of what you earn. There are other factors that go into the cost as well such as your age and health history. You would answer several questions about your health habits to determine the exact cost.
When is the best time to get disability insurance?
Now! No one can predict the future but you can put in place safeguards in case a disability will prevent you from earning an income.
How do I get disability insurance?
Many employers offer disability insurance as part of their benefit package so check with your HR department first. If your employer doesn’t offer this type of coverage you can buy an individual policy. There are also supplemental policies available as well.
If you have more questions or would like a quote for disability insurance give TheVanDyke Group a call.
Source: Principal Insurance
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your medical professional or legal representative for information specific to your needs.