None of us can predict when an accident will befall us. You may be happily working thinking that we will be as healthy as now. But what can you do if we are unable to work as a result of an accident or some medical condition? You can save for times like this with disability insurance. Disability insurance helps by replacing a part of your income when you are unable to work due to an illness or injury. Studies show that most individuals have more chances of acquiring a disability than dying. Hence, it is advisable that you get disability insurance to protect yourself in times of crisis.
The basic ways to replace your income from disability insurance are:
Employer funded disability insurance: Many employers have options of short term sick leaves, while others may offer long-term disability policies. Almost 60% of the salary is compensated. Some employers may offer health insurance but you must not mix disability insurance with health.
Social Security Disability Insurance: In case of no gainful employment as a result of severe disability, such a program can be provided to employees.
Individual disability insurance: Private disability policy allows an individual to get almost 50 – 70% of his salary compensated incase he cannot earn due to a disability.
None of us like to think about the time when we might be disabled. But the fact is, however much we may not like it, there might still be a time when we may have some sort of a medical condition that may render us unable to work for more than 90 days. What then? The loss of income is devastating at any time. Disability insurance is designed for such a phase in life. Individual disability policies and supplemental group plans usually cover up to 70% or 80% of the income. The benefits that you receive from disability policy will last for a specific term (a set number of years) or till you retire. Whether the benefits you receive will be tax free or not depends on who pays the premium. If you pay premiums out-of-pocket, then the benefits will be tax-free.
The good news is that disability insurance is not expensive for those who have less chances of injury at work than those who are at high risk e.g. those who work with heavy machinery. Talk to your agent and get disability insurance immediately if you still haven’t got one.
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