What is disability insurance? In the event that you get injured or become ill, this type of insurance protects your income. If you can no longer work, disability insurance fills in the gaps by paying out a percentage of your income periodically.
Most long-term disability insurance pays out between 60 to 80 percent of your usual income. While this still may present financial strain, it’s a much better option than being left with nothing and the inability to work.
Long-term disability insurance usually kicks in after the three-month mark. While it can be a lifesaver, the initial idea of paying a monthly premium can be off-putting for some people.
If you’re trying to gauge whether it’s worth it or not, we’ve assembled some information to help you deduce whether disability insurance is right for you.
Embrace the Fine Print
Many insurance policies are famous for working an essay’s worth of words into the fine print of the margins. However, a tiny caveat destroying your safety net after you discover you won’t be able to work again could be disastrous.
That’s why it’s important to thoroughly investigate each facet of your policy. This starts by looking at the benefit amount. After your disability, how much money will you receive each month?
Depending on your income, policies that offer to pay out 60% of your income might not be enough. Instead, you might need to seek out policies that offer a higher percentage.
Be wary of the elimination period, too. After an injury or illness, how long will you have to wait before benefits start? Most policies won’t kick in right away.
If you aren’t prepared for this, you could be financially strapped for months before payments start kicking in.
Check Your Policy
You should also pay attention to the benefit period. How long will the insurance company continue to pay out benefits after you are disabled? Some companies will pay out for life if that’s the plan you selected.
Also, compare the risks you are exposed to against your provider’s definition of disability. What illnesses, injuries, or conditions will they cover? What won’t they cover?
This can make or break when it comes time to cash in on your insurance benefits. This is crucial to pay attention to.
The last item you should prioritize is the premium amount. Insurance is a great idea and can end up saving you financially. But can you afford it right now, as a working person?
Look at the premium amount so you know how much this will cost you each month and each year. There are different ways to financially support yourself after a debilitating injury.
However, relying on the possibility of workers’ comp or a settlement isn’t a great safety net. Insurance is one of the most foolproof ways to go.
If you have questions to ask, don’t wait until you need a lawyer or are already coping with a workplace injury. Get started now!
Finding Long-Term Disability Insurance
Taking the time to find long-term disability insurance can protect you, your family, and your income in case of disaster. If you ever need it, it’s a great safety net.
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