4 Disability Insurance Tips
Disability insurance is designed to replace part of your income for a period of time if you become too sick or injured to work. Its benefit payments can help you cover living expenses and may help prevent a serious health problem from turning into a financial disaster.
Prepare for the possibility that you may one day be too disabled to work.
- The reality is that a twenty-year old worker today has a one-in-four chance to becoming disabled before reaching retirement age, according to the Social Security Administration. With odds like that, it makes good sense to prepare financially for the possibility that an illness or injury may one day make it impossible for you to work and earn a living for an extended period of time. One way to prepare for the possibility is with long-term disability insurance.
Don’t assume Social Security has you covered if you become disabled.
- Social Security does pay disability benefits, but only to the most severely impaired workers who can meet the definition of disability under the Social Security Act. And while Social Security benefit payments can be helpful, they are very modest with monthly benefit payments averaging about $1,258 in 2020. Long-term disability insurance from an insurance company may provide a larger monthly payment while you are unable to work.
Check whether company-paid insurance is enough.
- Some employers foot the bill for long-term disability insurance for their employees as part of their benefit packages. And although free benefits are always appreciated, please keep in mind that company-paid insurance may not provide enough coverage for your needs. Talk to us about how much coverage is appropriate in your situation. If it turns out that the company paid coverage is not enough, consider purchasing supplemental coverage to help bridge the gap between what your employer’s disability insurance will pay and the amount you may actually need to cover your living expenses.
Self-employed? No coverage at work? Consider an individual policy.
- If you do not have access to long-term disability insurance through work, consider purchasing an individual policy on your own. Buying an individual policy gives you the freedom to choose the policy that best suits your needs and your budget. And individual policies are generally portable, meaning that your coverage goes with you when you change employers.
Please consult with us for advice about disability insurance. With offices in Rutland and Williston, Vermont Copper Leaf Financial develops a customized wealth management plan designed to integrate every aspect of your financial life. Our approach is to provide clarity and calm amidst the chaos. Where there is uncertainty we look for facts. We call our approach evidence-based investing. Call us today at 877-974-5341 to schedule a strategy session and begin building your road map to financial success.
Article published in January 2021 edition of Eye on Money. If you would like to be added to our mail list please email email@example.com.