Whether you are a construction worker during the workweek or a base-jumper on the weekends, the dangerous aspects of these lifestyles can increase your chances of becoming disabled and not being able to work. No matter what your high-risk occupation or hobby may be, you may benefit from a long-term disability insurance policy, which can provide an income while you are unable to work . . . if you qualify for this type of health insurance.
Long-term disability coverage kicks in when a short-term disability insurance policy expires, which typically occurs after three to six months. Short-term disability will help to supplement your income if you are injured or have an illness. Long-term disability insurance is similar; it pays 50 to 60 percent of your salary, depending on the policy. These benefits can last until you are healthy and able to go back to work or up to a specified number of years determined by your specific policy. Some polices will pay out as long as you are disabled up until the age of 65.
Long-term disability is especially beneficial for people who need continued occupational therapy or physical therapy. These professionals are there to improve healing, help a person relearn tasks, a learn to cope with life after their rehabilitation is complete. If you don’t have the right disability insurance, your therapy might end before you are ready.
For people who work for employers that do not provide benefits, and for self-employed individuals who want disability coverage, there is the individual disability insurance option. Premiums and available benefits for individual coverage vary from company to company, and can also vary based on occupation. Premiums tend to be higher for polices that provide more monthly benefits and polices that offer benefits for a longer period of time.
High-limit disability insurance is another form of disability insurance to be considered. With this type of coverage, benefits will equal 65 percent of the income of the person regardless of the income level. Coverage typically is issued supplemental to standard coverage. With high-limit disability insurance, benefits can be anywhere from $2,000 t $100,000 per month.
Key-person disability is one other form of coverage. With this form, benefits are provided to protect a company from financial hardship that may result from the loss of a key employee due to a disability. Business owners to hire a temporary employee to fulfill the duties of the missing employee use this type of coverage.
If you are left to pay for the premiums with after-tax dollars then the disability benefits will not be taxed, but if the employer is paying for the policy, then the benefits will be taxed.
In today’s world about 25 percent of today’s 20-year-olds will become disabled for sometime before they retire, and the average long-term disability absence from work is 2.5 years according to the Council for Disability Awareness. These stats show the importance of long-term disability insurance. Most employers cover themselves by having workers compensation policies in places, but if you are left to purchase your own disability insurance you can contact your local independent insurance agents to learn more.
Who Should Have Life & Disability Insurance
According to a study by the University of Michigan Institute for Social Research, 1 out of 5 households owe more on credit cards, medical bills, student loans, and other debts than they have in savings. Because of that lack of cash flow disability insurance should have a place equal to life insurance in most financial plans.
While most people tend to think of disability as a risk that impacts older Americans, the numbers above clearly show that a large number of people can’t afford to miss even one pay period. The facts clearly show that disability claims can make a huge difference in a family’s financial health.
While life insurance is clearly understood by the population, disability insurance has remained an extra that can be eliminated to save money. But in fact, the odds of a disability claim easily represent a greater risk then the untimely death of a supporting parent. According to the council for Disability Awareness, the odds of a typical male, age 35, 5’10”, 170 pounds, non-smoker with an office job and some physical activity becoming disabled for 3 months or longer is 21%. If he smokes and weighs 210 lbs, the number jumps to 45%. At the same time the same male has a less that 1% chance of dying in the next year and can expect to live another 42.5 years.
Nobody really believes that you should drop your life insurance policy to purchase disability insurance, but, it definitely deserves a place in your long-term financial planning. Your local independent insurance agent can help you sort through your options and put together a plan that makes sense for your situation.
Be aware many individuals do not qualify for this coverage because of health problems and occupation.
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