The Benefits of Having Disability Insurance
Unfortunately, many things happen in life that we don’t plan for, but probably should have. Suffering a disability that keeps you out of work is just one of many unplanned situations. But, the purchase of a disability insurance policy is something that can help you plan for this type of devastating situation.
If someone sustains injuries that will keep them out of work for over a year may qualify for Social Security Disability. But what if you suffer an injury that keeps you out of work for a few months? How will you pay the bills? A disability insurance policy can help supplement your income when you have no other means of supporting yourself, or your family.
Financial security is something we should all strive to achieve, but sometimes that’s not possible. When you’ve suffered an injury that puts you out of work, you’re not only working to get yourself better, but the injury also has you stressed out about money. A disability policy eleaviates financial stress,, so that you can concentrate on getting better.
Short-Term Employee Policies
Some employers provide disability insurance to their employees. But these policies are short-term, and eventually those payments run out. If you’ve been injured in some type of accident, you may be able to sue the negligent party for compensation as the result of your injuries, and in fact, you should seek legal counsel on that very issue. But, a lawsuit takes time, months, if not years. While you may be successful in your claim, and eventually collect a judgement against the negligent party, you won’t see that money until well after you’ve gone back to work.
Advantages of a Private Policy
There are many advantages of having your own disability insurance police. One of the biggest advantages, aside from assurance you’ll have money to pay your bills, is that because you pay your own premiums, your benefits are tax-free. Benefit payments from your employer’s policy are counted as regular, taxable income at the end of the tax year.
There are other benefits as well. The policy you purchase on your own won’t be attached to your current job. This means if you are injured after you retire, you still have the policy to collect on. Or if you decide to branch out on your own and start your own business, having a policy before you start the business ensures you’re able to find an affordable policy. Once you start your own business, you may have a difficult time finding a policy you can afford.
There are of a couple of different riders you may want to consider when purchasing a disability policy. The first is called a residual benefit rider. This rider, which is also known as a loss of income policy, pays the difference between salaries should you need to seek employment in a different occupation due to your injury.
Another rider, if you can afford the premium, is a cost-of-living rider. This protects your future benefits from the destruction of inflation. With a private policy, your income is set the time you take out the policy. You can increase this income level as your career advances, without the need for a medical exam.