If We Become Disabled

According to government researchers, millions of Americans will be detrimentally impacted if Social Security is not replenished. An estimated eleven million people will see a drastic reduction in Social Security disability benefits by the end of 2016. The figures are expected to have far reaching economic effects.
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Long term disability insurance was once part of the supplemental benefits package of most employers. While some larger employers continue to provide this coverage, the trend is now for employers to pay less towards long term disability insurance premiums. Instead, employees are now required to bear the brunt of their own individual disability policies.

Why is disability insurance important?

Long term disability insurance provides coverage for individuals who have sustained an accident or are suffering from a prolonged illness. Most of us believe that they have friends or family who can help should they become unable to work for an extended period of time. Others believe they can live off of other sources of money, such as home equity or retirement savings. Such thinking is harmful in the long run. Social Security disability might be of some assistance when the disability is very serious. However, qualifying for Social Security disability insurance can be difficult to prove and once proven can take a while to activate. The money received from Social Security benefits are a fraction of what you can earn as an able bodied worker.

Disability insurance may be most important for workers in their 20’s and 30’s. A snowboarding injury in your 20’s or a cycling injury in your 30’s can affect your income for a significant period of time, even well into retirement. Luckily, an individual long term disability insurance purchase guarantees that your income level is relatively stable.

What is disability insurance?

Long term disability insurance begins when you can no longer work due to an illness or an injury for an extended period of time. It is just as important as any other type of insurance. Health, auto and life insurance cover emergencies that may happen at any time. Long term disability insurance is often the last type of insurance a person thinks about. However, it is the only insurance that protects income and it is statistically more likely to be needed during the working years.

How can I find the best disability insurance broker?

Selecting a good broker is an essential part of finding the best insurance for you. You need someone who can talk to you openly and honestly about what you are looking at {financially} should you become disabled and unable to work. Your broker should be able to share information with you clearly so you know what your policy covers. The definition of total disability, whether you need residual benefits, and options to automatically increase your coverage as your income increases are very important to understand. You need the information so you can make an informed and educated decision.

The payout

Should you ever need to use your coverage, the monthly payout is received tax free and approximates 2/3 of your normal monthly income.  An individual long term disability policy typically begins after a 90 day elimination period.

Conclusion

Disability insurance is an important purchase and one often overlooked. There is nothing else that can replace lost income for 20, 30 or 40 years in the event of an accident or sickness.  Long term disability coverage is especially important for young people. Whether single or with a young family, new workers haven’t had the opportunity to save for their future. Consider disability insurance as the opportunity to protect your financial well-being into the future.

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