For many people, the thought of not having enough money to pay regular monthly expenses is stressful. Unfortunately, if you were to become disabled and unable to go to work, that’s exactly what could happen. If you don’t have adequate insurance protection, you could find yourself spending your savings at an alarming rate. Disability insurance covers a variety of health conditions, providing a safety net for policyholders’ finances.
When an unforeseen medical condition hits, you can be blindsided by policy deductibles, co-pays and out-of-pocket maximums for traditional health insurance. Disability insurance, also called disability income insurance, is coverage designed to protect you and your dependents from the financial risks of becoming disabled.
When you have disability insurance and can’t work because your health condition qualifies as a “disability” under the policy, the insurance company will pay you a pre-determined monthly benefit amount every month during the amount of time that you are disabled or until the end of the term specified in the policy.
Those monthly checks are not intended to fully replace your income, but they can go a long way in helping you pay your mortgage or rent, car payments, insurance premiums, electric/gas bills, etc. You can also use the funds to help pay medical expenses not covered by your health insurance.
Some people assume that they don’t need to buy disability insurance because they’ll be able to get Social Security Disability coverage if their health changes.
However, Social Security Disability is notoriously difficult to qualify for. The application process can be arduous, and you must be able to prove that your health condition makes it impossible for you to work in any occupation for which you’re otherwise qualified based on your education and job experience. In other words, even if you cannot perform your current job, your application for Social Security benefits could be denied on the basis that you could perform some other occupation. In contrast, many private disability income insurance policies use an “own occupation” standard.
To obtain Social Security Disability benefits, you also must be expected to be out of work for at least a year because of your health. While private disability policies vary, you can generally find shorter-term coverage.
Finally, when your finances are tight, you need money as quickly as possible. The reality is that most people who apply for Social Security Disability benefits are denied initially. While you have the option to appeal a denial, it can take years for benefits to come through if they are eventually approved.
Under most individual disability insurance policies, you can purchase coverage for total or partial disabilities.
While each insurance company and policy can differ somewhat on what’s considered a “disability,” the following conditions may qualify you for disability benefits:
As you can see, the list of conditions that may be covered is broad.
Disability insurance policies can be complicated; different insurance companies offer different coverage options. You’ll need to determine how long you could reasonably wait for benefits to kick in (the “waiting period” — this may be between 90 days and one year) and how long you want benefits to last (anywhere from one year all the way to age 65 for long-term disability coverage).
Policies may also come with a variety of additional benefit “riders” you can add for an additional premium cost. These differ from policy-to-policy, but may include cost-of-living adjustments, options to purchase additional coverage, waiver of premium provisions that allow you to stop paying premiums if certain conditions are met, and more.
Because of the complexity, it can be invaluable to work with an experienced, knowledgeable independent insurance professional who can help you understand and evaluate various policy and coverage options.
Nobody wants to become disabled. However, if disability strikes, having adequate insurance coverage in place can protect you and your loved ones, providing the funds you need while you focus on getting back on your feet.
At Symmetry Financial Group, we know you work hard to make ends meet and save for the future. We can work closely with you to help you determine whether disability income insurance makes sense based on your financial situation and goals. If it does, we’ll help you apply for coverage and evaluate offers so you can choose the policy that will best meet your needs.
To learn more and to apply for disability insurance, contact Symmetry Financial Group today.