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About Disability Insurance
Many people never
insure one of their most important assets…their own income.
Health insurance will cover your medical bills, but who (or what)
will cover your mortgage payment, your phone bill, your cable bill,
your car payment, etc., if you are no longer working due to an
illness or injury? Credit cards last only so long before the debt
spirals out of control, and soon you will be forced to rely on
family members and loved ones for financial support. Disability
insurance is an effective method for protecting your income and your
lifestyle when you need it most.
Aside from personal disability insurance, business owners may
also consider Business Overhead Expense insurance, which will
cover monthly business expenses, and Business Reducing Term
insurance to cover large business loan payments. For more
information regarding business insurance options, please call or
email us directly. See the
Contact Us
page for details.
Short Term Disability Insurance
This type of coverage is created for individuals who are going to
miss LESS than three months of work due to an illness or
injury. In addition, these individuals DO NOT have sufficient funds
in an emergency savings account, and are living from paycheck to
paycheck. Many times, short term disability insurance will be
offered by your employer, which can usually be less expensive than
owning a personal short term disability policy. There are some
disadvantages to owning a policy through your employer, however,
those disadvantages usually effect long term disability policies
more so than short term disability policies. Read below for more
information.
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Long Term Disability Insurance
This type of coverage is created for individuals who are
going to MISS more than three months of work due to an
illness or injury. In fact, most individuals who require long
term disability insurance will miss, on average, about 18 months
of consecutive work. Without a proper long term disability
policy in place, the effects of a severe injury or illness can
be financially devastating to everyone around you. Roughly 45%
of all home foreclosures are from individuals who were
ill-prepared for such an event. Like short term disability
insurance, many times long term disability insurance will be
offered by your employer, which can usually be less expensive
than owning a personal short term disability policy. However,
there are some disadvantages to owning a policy through your
employer, and those common differences are listed below.
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Employer Offered |
Individually Owned |
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Typically less expensive
premiums.
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Most employer policies are
"generic" and DO NOT have many of the key features that
are included in personal policy (ie. True
Own-Occupation).
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Policies
are not flexible. You take it or leave it.
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Most importantly...The
monthly benefit you would receive will more-than-likely
be considered taxable income at the end of the
year! In other words, you may receive a monthly benefit
of %60 of your income, however, you must set aside
portion of that benefit to cover your taxes at the end
of the year.
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Premiums are usually more
expensive.
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Personal policies have
many more optional features that can greatly help you
should you need to begin collecting benefits.
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Policies are very
flexible. When discussing your policy, a variety of
options will be available to you which can modify your
premium.
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Monthly benefits ARE NOT
considered taxable income. It is unnecessary to set
aside a portion of your monthly benefit for tax
consideration at the end of the year.
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