Disability Insurance Is Critical to You & Your Family

Many adults and married couples know that having some kind of life insurance policy is a wise idea. Don’t leave your spouse, children, and loved ones with debt or other financial problems in-case of death or another unforeseen circumstance. You want your family to be safe and financially sound when you are gone; having disability insurance in place will make that happen.

Unfortunately, death is not the only factor to consider. I am sure you know of people who have been in vehicle accidents, slipped and fell, or were injured in other ways and can’t function as they used to.

Having a disability is hard on the individual, and on their family, because it comes with many medical costs that life insurance won’t cover. No-one wants to think about being disabled, however it happens all to frequently; what have you done to prepare and secure your family against the possibility of being disabled? Would they be able to survive without your income and added medical bills?

Social Security Disability Insurance

Would you be relying on your Social Security Disability Insurance (SSDI)? [FYI, it can take months for the SSDI to start paying-out disability benefits.] When the bills start stacking up, you don’t want to rely on something that is full of red-tape and bureaucratic decision makers who are not concerned about your disability, but rather how much is being paid out.

Short-Term Insurance

Short-term coverage insurance is offered to employees, via their employer, who have been injured. Some employers may even pay out a percentage of income to the individual for a select period of time. Disability insurance offered by your company is not totally reliable, especially when there is a waiting period involved; the average replacement payout is only 60% of your income and still taxable! Money Sense dives deeper into the numbers to unveil the real cost and benefits.

Long-Term Disability Insurance Is The Answer

You need something that is reliable and sure to payout if an accident were to occur in an untimely manor, that is why long-term disability insurance is a necessity.

Extending Employer Disability Insurance Coverage

It is always recommended to buy extended coverage through the disability insurance plan offered by your employer. This is cheaper than purchasing an individual policy and won’t require you to take another physical exam.

Individual Policies

Even though this option is more expensive it, it covers the individual offering peace of mind and financial security.

What you should think about before purchasing disability insurance:

  • If you are healthy, and younger, look into cheaper monthly premiums.
  • Depending on the type of disability policy purchased, it may not payout any benefits, unless you are unable to perform normal occupational duties or you job.
  • Purchase a non-cancelable policy – this protect you, the insured, from insurance providers refusing benefits payments, refusing renewal of your policy or worse, canceling your policy.
  • Investigate before purchasing whether the disability insurance policy only provides a two year benefit. This is important because some policies do pay out the normal Social Security retirement age.
  • Does the insurance policy exclude any pre-existing conditions? If you have had mental health problems or physical issues you may not be covered.

Our recommendation

As much as we would not like to admit it, accidents happen and they can be really serious and long-term, eating away all your savings and leaving your family in financial risk. It would be a good idea to start researching what types of disability insurance is available. Contact one of our branches to talk to a LRRCU employee who can help you make the best decision for you, and your family!

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