One of the most common myths of disability insurance is only those in dangerous or risky professions need it. The simple truth is if you rely on a paycheck to support yourself and/or your loved ones, you need disability insurance. Just over 1 in 4 of today’s 20-year old’s will become disabled by age 67 and the average monthly payment from the government for disability is $1,171. Could you live on that? With the median monthly rent in Staten Island being $2250, it is unlikely anyone could!
There a few important things to consider when looking for disability insurance:
- Amount of coverage: most policies will cover between 50-70% of your income. The best way to determine the amount of coverage is a thorough needs analysis.
- Group disability Coverage: some employers offer group disability insurance, however that may not be sufficient coverage. That amount will be taken into consideration when looking for individual disability plans.
- Elimination period: this is the amount of time you are required to wait after a disability occurs before you can receive benefits. Longer periods mean lower premiums, but be sure you can afford to meet all your financial obligations during that time.
- Benefit period: amount of time you will receive benefits. Again, the length of this period will affect premiums; longer benefit periods the higher the premium.
- Taxable or tax-free income: if your employer pays your insurance premiums your benefits will be considered taxable income. If you pay your premiums with after tax dollars your benefits will be considered tax free (according to current IRS regulations).
- Definition of disability: some plans will pay if you can no longer perform the functions of your current job, others if you are unable to perform any occupation. Each option offers a different level of cost and benefit
At Alpha/Omega Coverage, we can work with you to make sure you’ve got the coverage you need, while at the same time using all possible credits and discounts to make that coverage affordable. In addition, our financial division, Alpha/Omega Financial Services, offers a complimentary financial review, including a thorough disability insurance needs analysis, to all new and existing clients. Just give us a call at 718-494-4440 or send us a note at Mike@insureSI.com. We want to help you meet your goals, and make sure what’s important to you is protected!
The author is providing the material and viewpoints on a generic informational basis. All references to various insurance policies, coverage terms, policy language, exclusions, definitions etc. are from a broad selection of general insurance information. It is not intended to be used for any specific policy or coverage situation. The views expressed by the author do not necessarily represent the views of the insurance companies it represents. Content has been referenced from Life Happens, a nonprofit organization.