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Click on the video below to learn more about the importance of Disability Insurance Planning.
Disability coverage is yet another integral part of an excellent protection-based plan that provides a source of income if you are unable to work due to an accident or illness. Remember, too, that your earning power and ability to earn a paycheck is one of your most powerful financial assets.
Those who decide not to seek out and purchase disability insurance protection are making a choice to live with significant risk. They are placing not only themselves but also their dependents at risk of losing their ability to pay for them home, daily living expenses, and their ability to maintain their investments.
Disability insurance is especially critical for those who are self-employed and those who find it challenging to “save up” or accrue employer-paid sick leave. Some employers provide disability coverage, but it is usually short-term and may only replace a small portion of a worker’s salary. You’ll also often find that employer-sponsed group disability isn’t portable which, of course, would prevent you from being able to take it with you if and when you choose to leave.
When taking a look at individual disability coverage, you will typically find that most policies are designed to replace about two-thirds (60%-70%) of a worker’s monthly income. There are two key features of disability insurance that greatly influence cost with which you need to be familiar:
DEFINITION OF DISABILITY
OWN OCC (“own occupation”) policies are more costly as they provide disability benefits when you are unable to perform duties of the job for which you are trained (e.g., orthopedic surgeon, neurosurgeon, physician) - which means, even if you’re still able to do other types of jobs, but you are not able to do your chosen profession, then you will receive benefits under your disability policy. On the other hand, ANY OCC (“any occupation”) coverage defines disability as the inability to do ANY type of work.
ELIMINATION PERIOD
The elimination (or waiting) period really amounts to a “time deductible” as this is the number of days after a disability begins before benefits will be paid. As a rule of thumb, you can expect premiums to go lower as the elimination period gets longer and the monthly benefit gets smaller.
Let’s Get Started!
So, if you’re a small business owner or an independent contractor and yours is the only income in your household, let’s connect and have a discussion about your disability coverage options today.
Cameron A. Michels
Insurance Advisor / Planner
PLANWELL Wealth Solutions
706.604.7526
[email protected]