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Disability Insurance Protects Children’s Futures

Posted on: Wednesday, June 16th, 2010

Most of us who are parents dutifully put away money every year for our children – for their education or whatever future goals they wish to pursue. Just as we put away money for our retirement, and fund life insurance policies, IRAs and our other investments, we look upon this kind of savings plan as a way to responsibly lay the foundation for our kids and protect them as they venture out into the world for the first time.

It’s been said, however, that even the best laid plans are vulnerable to the ebb and flow of life; and our finances are just as vulnerable. We may have particular financial plans in place, but this doesn’t mean that they will be carried out that way, especially if a household earner becomes ill or injured and is unable to continue their job and earn the paycheck they have become accustomed to earning. In such cases, everything from savings accounts to college funds are vulnerable in order to help keep a family afloat.

Disability insurance plans, however, are meant to protect such financial savings by providing a monthly “wage” in place of lost salaries to those who are injured or become ill.

Disability insurance is offered through a number of different programs; everything from short term insurance to long term disability insurance that is meant to provide coverage up until the traditional age of retirement. Policyholders essentially choose the plan that will provide enough coverage to replace the amount they are currently bringing home on a monthly basis. It is essential for potential policyholders that are just determining their best policy to be sure to calculate all of their monthly expenses – everything from mortgage payments and utilities to food and clothing. By providing themselves adequate coverage through disability insurance, policyholders are not only making sure their family is protected but also protecting the savings they have worked so hard to accumulate for their children’s futures.

When Group Disability Insurance Plans Are Not Enough

Posted on: Thursday, June 3rd, 2010

Many household earners have considered a disability insurance plan in terms of protecting their family in the event of their own injury and subsequent loss of income. In fact, there are some disability insurance plans that are offered through a person’s employment that provide at least some disability insurance coverage. In such a situation, policyholders may believe that this coverage is more than enough to see their family through a financial crisis should their primary income disappear. But when you look more closely at the details of such a policy, many are likely to find that most of these group policies fall far short of being able to fully protect their family.

Many group disability insurance plans offer disability coverage for their employees only if their injuries occur at work. In other cases, the disability insurance provided is significantly limited – offering only short term coverage or coverage amounts that are inadequate for sustaining their household. For this reason, many consumers find that they must supplement their disability insurance coverage with an individual plan.

Supplemental disability insurance plans will cover those policyholders that are injured under any circumstances and in any location – even if it’s not in the workplace. Further, individual disability insurance plans are able to provide comprehensive coverage for policyholders; the amount of the policy is determined by the policyholder and is based on their current monthly income and what is financially adequate to meet all financial obligations on a monthly basis should their income be disrupted.

Comprehensive disability insurance plans will protect the household in the event of a catastrophic injury that prevents primary – or even secondary – earners from reentering the work world. By working with a professional disability insurance plan provider who understands the industry and the amount of coverage that will be sufficient and affordable, prospective policyholders can purchase a policy with peace of mind.

Determining the Amount of Adequate Disability Insurance

Posted on: Tuesday, March 16th, 2010

Just as we go through the steps to ensure that we have adequate life insurance coverage should something happen to us, so must we go through similar steps to ensure that we have enough disability insurance coverage should we become injured or ill. While many companies offer disability insurance plans to their employees, they are often far from substantial in providing adequate coverage. Therefore, it is often necessary to purchase additional individual disability insurance to protect the policyholder’s family in the event of the unexpected.

Essentially, if the policyholder is injured or becomes ill and is no longer able to return to work, the disability income insurance they have purchased will take the place of missed wages. The most significant part of purchasing a policy, therefore, is determining how much disability insurance is enough to sustain a family – either temporarily or until the age of retirement – if a paycheck is suddenly gone.

Therefore, potential policyholders should consider:

* The amount they pay out on a monthly basis in terms of mortgage payments, utilities, food, fuel, debt, and any other household expenses. This is an absolutely critical part of the process of applying for disability insurance. Consumers must be relentless in determining their monthly expenses, leaving no stone unturned, and being honest about what they spend. Putting everything out on the table will allow them to make more educated decisions.

* Their age of retirement. The average age of retirement is sixty-five but this certainly doesn’t hold true for everyone. Long term disability insurance policies are generally meant to cover policyholders up until the age of their retirement when retirement investments, savings, and pensions take over. Knowing the reality of their situation makes for better planning.

* Their budget. While we would all certainly love to have all the insurance we want, sometimes it’s unaffordable. Working with a reputable disability insurance agent will allow applicants to balance their insurance needs with their financial guidelines.

The Process of Getting Disability Insurance

Posted on: Wednesday, February 24th, 2010

There comes a time in every adult’s life when they understand the need to put certain provisions in place should anything become of them. After all, with families depending on our income – now and well into the future – a death or disability can mean financial disaster for an entire household, on top of the emotional turmoil that they will undoubtedly already be experiencing. The point of insurance – life insurance and disability insurance – is to take the financial burden off of the family so that it is not just another component with which they have to deal during this already trying time.

Life insurance is self explanatory and is absolutely necessary to protect families in the event of the policyholder’s death. But while life insurance is generally accepted as a necessity, disability insurance – for untold reasons – is often looked upon as more of an option. However, when you consider that nearly one out of every seven people will become disabled by the time they reach their mid to late 60s, you begin to understand just how crucial disability insurance is to protect families.

The process of getting disability insurance is very similar to applying for a life insurance policy. The prospective policyholder will work with a knowledgeable disability insurance representative that will go over all of the different plan options. This is the most important part of the process, as there are short term disability plans, as well as long term disability insurance. It is essential that the policyholder accurately scrutinize exactly how much they will need on a monthly basis – should they become sick or injured and not be able to perform their job – to support themselves and their family. Long term disability insurance will generally cover policyholders up until the traditional age of retirement.

Once a disability insurance plan has been chosen, prospective policyholders will be asked to submit to a medical exam by one of their licensed medical practitioners. This is a general medical exam and can be completed within the prospective policyholder’s home.

Disability Income Insurance Protects a Home

Posted on: Monday, February 1st, 2010

For most of us, our homes are the biggest financial investment that we will ever make; an investment that we need to protect as best we can. Throughout our lifetime there are a myriad of things that can happen that can endanger our ability to pay our mortgage, and before we know it we could be in a position where we are facing a foreclosure. When we consider the fact that most of us would be in serious financial trouble if anyone in our household were to lose their salary, then it becomes clear very quickly just how important it is to make allowances for those circumstances that we may not be able to anticipate.

Disability income insurance is a protective feature chosen by many people who want to protect their earnings should they experience an illness or injury and not be able to return to their current job. A loss of salary could be financially devastating for a family, and so policyholders put disability insurance into place so that they are not financial vulnerable if their physical (or in some cases, mental) condition causes them to have to leave work either temporarily or permanently.

Clearly the benefits of disability income insurance are numerous and most policyholders understand that by enacting a disability insurance policy they are protecting their family’s ability to continue to live their life comfortably. But beyond the ability to pay utilities, buy food, and pay for the day to day expenses that come with living a life, disability insurance allows policyholders to protect their financial investments. This protection is extended to everything from savings accounts and 401k investments to college savings and IRA accounts – anything that we would have to quickly access and ultimately deplete if we found ourselves without a salary for an extended period of time. But beyond that, disability insurance protects our largest financial investment – our home – from vulnerability.

Turning Our Back on Disability Insurance, Part II

Posted on: Monday, January 4th, 2010

In the last post I related my family’s experience when I suffered a terrible car accident and was out of work for an extended period of time. My husband and I, even with two small children, had been convinced that disability income insurance was a waste of money and that we were better off putting those policy premiums toward something else.

In the wake of my accident I had enormous physical and emotional trauma to deal with; our finances were, quite honestly, the last thing on my mind and I know my husband did his best to hide a lot of what was going on from me so that I could just concentrate on getting better. But before long it became absolutely necessary that we turn our attention to our finances as we were beginning to receive notices from bill collectors and were even starting to get preliminary foreclosure notices on our home.

With no disability insurance we had been vulnerable to my loss of a paycheck and now instead of being able to focus on the task at hand – getting better and still parenting our children, even with limited physical abilities – I was worried about having our home taken away from us in the midst of this already stressful time.

We got enormously lucky. Our family came together and helped pay the back mortgage payments as well as the other outstanding bills that had come due while I had been out of work. And just a few short months later I was back to work and earning my paycheck again. I am still undergoing physical rehabilitation but I am getting stronger everyday and we are working our way back to being financially stable. Now, just as we pay our life insurance premiums, we are paying premiums on our new disability income insurance policy that we have taken out for both me and my husband so that we may never again face that kind of vulnerability.

Turning Our Back on Disability Insurance, Part I

Posted on: Monday, December 14th, 2009

I got myself in a situation a couple of years back that I wouldn’t wish on anyone; and the fact of the matter is that I tell everyone I meet my story so that they can think long and hard about the choices they make. You never know if taking the easy (or cheaper) way out today is going to cost you tenfold in the future. That’s exactly what happened to me.

Several years ago I was just starting out in my professional career, having recently graduated from college. My education was pursued a bit later than most as I had gotten married and had two children before I went back to school and got my degree. When I was offered my job I was happy to accept it, as it was everything I was looking for professionally and offered the salary and benefits that were so important in helping to sustain my household. Of course my husband and I had thought nothing of purchasing life insurance after we were married – and even of increasing the amounts on the policies when we had the kids – but we were less inclined to purchasedisability insurance. We were managing to pay our bills with our salaries but the truth was that we just didn’t want to spend any more money on insurance; and we honestly felt like it was something that we wouldn’t need. Boy, were we wrong.

Approximately thirteen months after starting my new job I was in a terrible car accident. It was no one’s fault really; just the result of a dark, rainy night, poor visibility, and slippery roads. I broke several bones, suffered head trauma, and required months of physical therapy. My husband and I were so focused on dealing with the physical repercussions of my situation that we only turned an obligatory eye toward our finances when it became necessary.

Which it soon very much did.

In the next post, I’ll continue my story of what the decision not to purchase disability insurance meant for our family.

Sign on for Disability Insurance, Part II

Posted on: Tuesday, November 24th, 2009

In the last post we discussed some of the reasons why younger employees – just starting out in a job – may not consider life insurance or disability insurance to be something that is necessary. For such employees – often in their twenties – the thought of death is very far away in their minds; and, as far as illness or injury, they are something that surely would not happen to them.

But – as we quickly discover – both of these scenarios are inaccurate. For one, we are all going to die. And if we die while we still have young children – not to mention a spouse – who are dependent upon our income life insurance will be paramount to their financial survival. Further – as we also discover as we continue to have life experiences and see first-hand what can happen – illness and injury is not in any way confined to a particular age group. In fact, the younger we are when we experience a disability the more financially vulnerable we are; we have not had the time to build up savings accounts that may help to support us – including retirement accounts, may not have enough equity in a home to call upon, and may (as most people do in this age group) be living paycheck to paycheck. What happens when that paycheck suddenly disappears?

Disability insurance is meant to cover those who have experienced an illness or injury and are not able to return to work. This policy will just as easily cover someone who must take a short sabbatical from work as they recuperate as it does someone who finds themselves permanently disabled and unable to return to work at all. It is only a matter of finding the policy that works best for you and your family. Make the purchase of disability insurance something that you do in the beginning of your career – as one of the steps that you take in protecting your future and that of your family’s future.

Sign on for Disability Insurance, Part I

Posted on: Monday, November 23rd, 2009

Early on in our careers there are many decisions that we need to make in terms of how much money we need to take out for taxes (What number do we put in the box of dependants – this has always been a tricky one.), which health insurance is most beneficial for us (do we go barebones if we are single? Do we get a more comprehensive plan if we are married?) and how much do we put aside for retirement (Retirement? That sure seems like a long way away!)

The fact of the matter is that for most young people it is very hard to imagine anything bad happening to us. Retirement seems like a million years away, we can’t imagine getting sicker than coming down with the flu, and taxes are just something that we pay. But as we get older we find ourselves making more comprehensive plans for our healthcare as we have very quickly come to realize that we are in fact susceptible to illnesses of all kinds and beside that, we now have a family to cover; we start putting money hand over fist into our 401k plans because we have also come to discover that retirement, once a far-fetched idea, really isn’t as far off as we had thought; and, as far as those taxes, well, we hire an accountant.

Some of the other areas that may suffer from too little attention in our younger years are life insurance and disability insurance. Life insurance is often not too much of a consideration because, after all, we’re not really going to die (ahhhh, the immortality of our twenties) and disability insurance is only for those who have an illness that they think may one day prevent them from doing their job.

In the next post….we address these inaccuracies and uncover the necessity of such things as disability insurance.

Disability Insurance Plans Offer Many Options

Posted on: Tuesday, November 17th, 2009

Choosing any kind of insurance plan can be overwhelming at best; especially when you consider that most insurance is meant to help us or our family in the event of a death, illness, or injury. These are not uplifting thoughts for anyone to consider; but still they must be considered in order for us to be our most responsible selves. Is it awkward and uncomfortable to go through the process of choosing life insurance – discussing the details of our hypothetical deaths? Sure it is! But it still has to be done if we are going to be able to best protect our children and our spouses – as well as the rest of our family – in the event of our death.

The same goes for disability insurance. Should we become ill or injured – deemed disabled – and unable to return to work, how will we be able to account for that missing paycheck? For most of us who are living paycheck to paycheck and still struggling to pay our bills on time, the thought of losing that paycheck for even a short amount of time is absolutely inconceivable. In short order most of us would be facing foreclosure and even bankruptcy. Disability insurance helps protect families against these possibilities by essentially replacing the paycheck that is lost when an earner cannot return to work.

There are still many decisions to be made regarding disability insurance as there are many disability insurance plans available to suit a variety of circumstances. It is only necessary to determine what your financial needs are in the present – balanced with what your financial needs would be if you were to lose a salary – to find the disability insurance policy that is best for you and insurance policy premiums that are still affordable. By changing options such as length of time you would have to wait before the policy pays out and the length of coverage time, you can change the premium costs considerably; so do your research and choose wisely.