DISABILITY INSURANCE

Questions? Speak with a Disability Insurance Specialist @ (205) 578-2097

In the U.S. today, there are over 37 million disabled Americans. If you became disabled what tough choices would you make for your family’s well-being? Disability insurance replaces your income, including bonuses, commissions, and even your retirement contributions. Most of all, whether you’re unable to work for a short period of time or permanently, your family or business will make it.

What is Disability Insurance?

Just over 25% of today’s 20-year-olds will become disabled before they retire. Therefore, statistically, you’re far more likely to need disability insurance than other types of coverage. What is disability insurance? Disability insurance replaces your income in the event you can no longer work. Disability can happen from either accidental injuries or as a result of illness. What can be more important to a business or our family than our ability to work and earn income?

How Much Coverage Do You Need?

First of all, a good place to start is to replace 60% of your income. Why 60%? That’s an amount of income similar to your takehome pay after taxes are paid. Also, remember that the goal is to return to work if possible. As a result, insurance companies don’t want to incentivize you to stay home.

It’s also noteworthy to consider how long you would like the benefit? Your policy can replace your income for a short period of time or as long as to your retirement age.

Likelihood of Needing Disability Insurance

How likely are you to need your disability coverage? According to a recent study done by the Social Security Administration, just over 25% of today’s 20 somethings will be disabled before reaching age 67. That bears repeating; 1 out of every 4 persons will become disabled at some point in their lifetime! Sounds risky, doesn’t it?

According to a recent study done by the Social Security Administration, just over 1 in 4 of today’s 20 somethings will be disabled before reaching age 67. -Social Security Administration Statistics on Disability

What Types of Disability Insurance Are Available?

GROUP DISABILITY PLANS

The most common form of disability insurance is through employer-provided benefits. An employee can voluntarily have coverage via salary deduction. Group disability is generally affordable, yet most group benefits are limited in coverage. Consequently, group plans place a limit on the monthly or annual benefit that can be paid out to you. Having some coverage though is always better than nothing. Therefore it’s important for you to read the policy and know what you’re paying for!

SHORT-TERM DISABILITY INSURANCE

Short-Term Disability (STD) pays a portion of your income for a short period of time after you run out of sick leave. Depending on your plan, STD generally will pay a benefit up to 52 weeks.

LONG-TERM DISABILITY INSURANCE

Long-term disability insurance (LTD) is an insurance policy that protects a person’s income in the event a person is unable to work for long periods of time. Policies can be designed to pay out a monthly benefit anywhere from one year or until retirement age when social security is accepted.

Owning Your Own Policy

Many employers do not offer a disability benefit for their employees. Even still other plans offer a benefit but with substandard coverage. Either way, it may make more sense for you to own your disability coverage. You can own your coverage by purchasing a policy. Also, you can purchase a supplemental policy, in addition, to what your employer provides. Supplemental disability policies are an affordable way to make sure your family is protected. One thing to remember, the average person changes jobs over eight times in their career. Consequently, you’re likely to be without any disability protection eight times in your life -for as long as it takes to find employment. This assumes that your new employer will have disability insurance as a benefit, to begin with. In conclusion, it makes sense to own all or at least a portion of your disability protection.

Doesn’t Social Security Cover Disability?

Qualifying for social security disability, also known as, SSDI, can be rigorous. Consequently, nearly two-thirds of all applicants are turned down for coverage. If you are approved for SSDI, your benefit will be based on what you’ve paid into the system over the course of your work history. In 2013, according to SSA, the average monthly benefit was $1,130 per month. Your disability policy provides a benefit on top of your social security benefit to get your income back to the 60% mark.