Disability Insurance for Family Protection

by Michele Postler, Monday, December 10, 2012

For most people, when asked what their greatest asset is, they say something like, their job, and house or retirement package. But they don’t think of how they got those things. They don’t realize that their greatest asset is their own ability to earn an income. It’s the skills each individual has attained throughout their life, either by school or experience and the ability to put those skills to use, which makes the income they have at this point. That is the greatest asset each of us has.


Disability Claims are on the Rise

Unfortunately the number in disability claims has risen and surprisingly in 2007 it was reported that 62% of personal bankruptcies were due to medical problems. It is more likely that before you are retirement age you will have a need for disability insurance before the use of life insurance. Meaning that in most cases an injury will occur that doesn’t actually end in death.


Disability insurance is becoming more and more important, because people are realizing that if they can’t work they can’t earn an income and at any point in their life this realization could cripple the financial wellness of a family.


Disability insurance is intimidating and expensive, but if you think about how much you make a year and how you will survive if that income is almost completely lost then investing in disability insurance isn’t so bad. You can find a plethora of information on disability insurance online; you can even get disability insurance quotes and rates online.


Two major types of Disability Protection

There are two major types of disability insurance that should be in your mind when you start your research:


Short Term – There are two options for short term disability insurance. One is for Accident only Disability Insurance. This will cover you for a short period while you wait for your company benefits to kick in. This is the least expensive policy because it is only covering you for up to three months until you receive your company benefits. This type of policy is only for accident not sickness.


The other option for short term insurance is Accident and Sickness disability insurance which covers you for sickness as well as any accidents that may happen. There a plenty of different options that can be added to this policy like, adding a survivor benefit, which gives your spouse a lump sum payment if you were to become deceased during your disability benefit. As well, the company will not cancel the plan at any time up to age 67 provided your pay the premiums. You have the option of extending the policy longer than age 67 but your premiums will increase each year.


Long Term – The first main differentiation from the short term policy is that the monthly benefit is a lot larger. You can receive a portion of your income to a maximum of $10,000 per month. This is a long term policy that will cover you for years instead of months. This is the best for you if you have enough savings to float your family’s expenses for a couple of months until the policy kicks in. One of the options you can add to this policy is the cost of inflation rider which increases your benefit with the cost of inflations so your income is not degraded by inflation.


Some positive news

Some good news is that most cases of cancer do not result in death. They are making leaps and bounds in the cancer treatment, that coupled with early detection is allowing cancer treatment to be successful so a lot of people are surviving it. This is just one of the reasons disability insurance is so important. There is a lot of down time that is needed to heal and get on with your life.