Americans will suffer from a disability before reaching retirement age. 2
Is the average long-term disability claims duration. 3
Is the average monthly disability payment from the government. 2
The time between the date of injury or diagnosis, until you start receiving benefits. The elimination period you choose can affect your premiums.
A percentage of benefits are paid based on a percentage of lost income if you aren’t totally disabled (for example, a 50% loss of income would entitle the insured to 50% of their monthly benefit).
Additional coverage may be purchased to cover serious disabilities that are likely to increase your living expenses.
A policy may pay expenses for a rehabilitation program to help the disabled person return to work in his or her own occupation.
Increases the monthly disability amount while on claim either at a fixed percentage or tied to increases of the Consumer Price Index.
A future insurability option can allow you to purchase additional coverage as your income increases.
If disability insurance is not provided by your employer or if your coverage is insufficient, it may be wise to consider adding it to your financial plan. A First Command Financial Advisor can review your existing coverage, and recommend a policy with the features that make the most sense for you and your budget. Talk to a Financial Advisor today.
The truth is that 90% of disabilities are caused by illness rather than injury, and statistics show that more than one in four of today’s 20-year-olds will become disabled at least once in their lifetimes. The best way to decide whether you need disability income insurance is to ask yourself whether you can afford to go without a paycheck for six months or more.
Social Security Disability Insurance pays benefits to you and certain members of your family if you are "insured," meaning that you worked long enough and paid Social Security taxes. Supplemental Security Income pays benefits based on financial need. Only individuals who have a disability and meet medical criteria may qualify for benefits under either program.
Don’t assume that disability insurance is too expensive to fit into your budget. By looking at the value received compared to the cost, disability insurance is actually less expensive than auto or homeowners insurance. For just a few dollars a day, a person can insure millions in tax-free income. Protecting the income of a family’s primary wage earners is an essential consideration in a personal insurance strategy and financial plan.
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1. The Disability Survey conducted by Kelton Research on behalf of Life Happens, April 2012.
2. ssa.gov, The Facts about Social Security’s Disability Program.
3. Chances of disability, according the Council for Disability Awareness