Accidents and illness are a part of life. Sometimes they creep up on you and last for an extended period of time. Sometimes they happen suddenly and impact your family. You may suffer financial instability if you are unable to work due to an illness or injury. Your monthly financial payments do not stop, and when you are not bringing in a solid income, it can be stressful and strain your ability to recover fully when you have to worry about them. Having disability insurance can provide extra security of income during the period that you are unable to work. If you have disability insurance you would receive a monthly payment after a predetermined waiting period to help cover your finances throughout this period. The catch is, you need to look into disability insurance now before you need it the most.
How does disability insurance work?
If your job offers benefits, then it most likely offers disability insurance as well. It may be worth investing in the extra cost because accidents happen and you never know if one will impact your ability to work. Generally, disability insurance replaces between 60% and 85% of your regular income, up to a maximum amount, for a specified time. Even if you have an office job, it may be worth looking into getting additional coverage. If you have a lower back injury, it may be hard for you to sit and concentrate long enough to answer your emails. If you have a severe concussion, it may be hard to focus on your daily tasks.
However, the disability insurance from your employer often does not cover all your expenses when you need it the most. Having separate disability life insurance through a life and health insurance agent provides you with more flexibility and different options so you are still able to pay your bills and expenses.
If you’re self-employed, you can still get disability insurance that can help cover your expenses when you’re unable to work. This is of utmost importance when you’re supporting your family.
Reasons why you should get disability insurance and how it can help you
- If there is a family history of a genetic disease or illness, it may be worth looking into getting disability insurance in case your symptoms develop and you must take time off work to cope and heal.
- You work in a physical job and it requires you to push your body to the max. Repetition over time can cause wear and tear on your joints so a job like construction is very strenuous on your body. Thinking ahead is the key to preventing any stress if you must take time off work due to the injuries that develop over time.
- Working in a job that has a high level of stress can also be a factor. A disability doesn’t have to be a physical injury stopping you from working. Mental health can also prevent you from being able to safely and efficiently do your job. You may need to take time off for the sake of your mental wellness. Disability insurance can help you in this case by providing an income and ensuring you keep your job going forward.
- Without disability insurance, you may have to dip into other savings in order to pay your bills. Your injury or illness may result in months or years without working. Protect your hard-earned savings, like your retirement fund, by not having to withdraw from them to cover your expenses. Having disability insurance replaces a percentage of your wages, so you don’t have to touch your savings if you end up taking time off for an illness.
Short term disability insurance vs long term disability insurance
Short-term disability coverage typically provides benefits for up to 6 months while you’re sick or injured. Long-term disability coverage largely depends on what type of plan you’re enrolled in but typically provides disability benefits for up to two years if you’re unable to return to your job. After those two years are up, you may continue to receive benefits if you are still unable to work at any job due to your illness or disability. Most long-term disability plans will replace 60% to 70% of your normal income.
What impacts the cost of your disability insurance?
You will need to work with a financial planner to find the best rates for your disability insurance. Insurance companies will ask you a series of questions including:
– Your age and health. The older you are, the more likely you’ll have health problems that will need to be covered;
– Your sex. Women usually pay more because they tend to file more claims;
– Whether you smoke. You’ll pay more if you do smoke because you’re more likely to have health issues;
– Your occupation. You’ll pay more if you work in a job with a higher risk of injuries; and,
– Your income.
Why working with an experienced and reputable financial adviser is important
If you’re not part of a disability plan, you may have to rely on Employment Insurance (EI) benefits if you have used up all of your sick leave, and have worked enough hours to accumulate EI. However, this still doesn’t provide you with enough money if you have to strictly rely on it. EI is also only available for a limited period of time. By working with a financial advisor, like myself, Darren Robinson, I can help find the best disability insurance plans that fit you and your family’s needs long-term. I highly suggest looking into it sooner rather than later to make sure you are covered if an accident or illness does occur. Give me a call at 705-315-0516, or send me an email at [email protected] to discuss your options and together we will find the best option for you.