Many people assume that an event that causes disability won’t happen to them. But what would happen if you or your spouse were unable to work? Would you be able to pay your bills each month if you had no income?
According to the Social Security Administration, 1 in 4 of today’s 20-year-olds will become disabled before they retire. Think you’re at a job that wouldn’t cause you to become disabled? Typically, the reason that people can’t work is due to an unexpected illness, rather than injuries.
Below are some common questions to help you understand disability insurance.
What is disability insurance?
Disability insurance is income protection that covers a percentage of your salary, should you have a disability that prevents you from doing the regular duties associated with your occupation.
Isn’t disability insurance covered by my employer?
Most employers offer some type of disability insurance, but it may not be enough. Check to see exactly what your disability benefits are, how long your waiting period is to begin to collect benefits, and how long benefits will be paid (long vs. short-term disability insurance).
What’s the difference between short and long-term disability?
Policies vary, but in general short-term disability covers around 6 months or less. Long-term disability is designed to protect again catastrophic illness or injury that ends the person’s ability to work. Long-term policies will typically pick up after a short-term policy ends.
How much disability insurance do I need?
In general, it is recommended that disability insurance cover at least 60 percent of your income. Calculate what your monthly expenses are and how much income you would need to cover them.
Does Social Security cover disability?
It depends. Social Security will pay disability benefits if you meet their definition of disability, which is different than other programs. Social Security pays only for total disability, partial disability is not allowed. Also, you must have earned enough Social Security work credits to qualify, and the amount that is paid out is typically not enough to cover the average person’s expenses.
Is disability insurance expensive?
Disability insurance can be tailored to fit different needs and budgets and is relatively inexpensive when you consider that it’s protecting your most valuable asset, your income!
Having a disability insurance policy in place will help you maintain your current lifestyle and give you peace of mind.
Contact me, to further explain how disability insurance can protect you and your options.
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