Disability Income Insurance

Disability Income Insurance

It is often assumed that one’s home or bank account is our primary asset. But individuals often forget that without the ability to earn a living, they’re unable to maintain the household.

Your ability to continuously receive income is the number one component of a successful financial plan for those who are still in their working years. Disability Income insurance not only helps ensure that your expenses are covered today, but it also helps you continue planning for your future, with the least possible financial constraints.

Who needs it?

Virtually everyone with earned income needs it. More importantly, 1 in 4 people will be come disabled before age 65. 90% of disabilities will be illness related vs. 10% resulting from injury: Migrane headaches, chronic back pain, depression, stroke, heart attack, cancer, etc.

What’s important to know?

While many rely on government benefits, they overlook the fact that many disabilities are NOT related to work, so worker’s compensation may not apply. Some rely on coverage from their employer. It’s a good start, but there are limitations in benefits, including tax liability. Individual coverage helps fill in the gap.

How to design the policy that’s right for me?

Definition of Disability

BEWARE: every company defines disability different. Some Pay benefits if you can’t perform the duties of your job and others only pay if you’re unable to work at all. Partial disability and residual benefits for
Specialists: Physicians, Surgeons, Attorneys, Dentists and other professionals could receive benefits, even if they’re able to continue to work in a reduced capacity.

Benefit Level

Disability Income Protection typically pays between 40%-65% of your earnings at the time you purchase your policy.

Noncancellable vs. Guaranteed Renewable

Noncancelable means the insurance company can NOT cancel, increase premiums or reduce benefits of your policy as long as premiums are paid.
Guaranteed Renewable means that the insurance company can NOT cancel your policy, but they reserve the right to increase premiums based for an entire class (but not based on your individual circumstances).

Benefit Period

Several options: Choose to receive benefits for 2, 5 years, and even all the way to age 70.  Additional options for medical residents and newly graduated professionals, including: student loan repayment, future increase in benefit (based on income increase, cost of living adjustment rider (COLA), among others.