We’ve already talked about how to start planning for a better 2019, but now on to the specifics. One strategy we recommend involves disability insurance. While some people see this as an unnecessary expense, others view it an integral part of their portfolio. Learn more about how disability protection can help you plan for the future—starting today.
What It Does
Essentially, disability insurance is designed to protect your income. One of your biggest assets in any career is your earning ability. What would happen if that were disrupted? Financial experts recommend having up to 6 months of your regular salary in savings, but few people are able to do so. Plus, after one case of disability, that could be completely wiped out—along with any other contingency funds you may have had.
But disability insurance keeps you covered. It typically pays around 2/3 of your gross income—without the taxes coming out—so you can continue with your financial plans. Including paying your bills, saving for retirement, and enjoying your lifestyle without the disruption of an accident or injury.
When to Get It
While you can use disability insurance as a planning tool, ideally, it’s a protection you want to pick up before you need it. Many policies cover a wide variety of medical ailments, including things you can plan like scheduled surgeries and maternity leave. However, they may also have pre-existing provisions in place that exclude recent diagnoses from the first year of coverage (or so). Don’t wait too long to sign up! It’s better to have that financial safety net for a little longer than it is to risk a period of disability without pay.
Who Can Help
Depending upon your resources, you may or may not have access to this coverage through your employer. Companies may include it as a voluntary benefit, or even offer to pay for the policy for the employees! If you’ve got group disability insurance through work, just be sure you understand how your policy works. Ask about waiting periods, exclusions, pre-existing conditions, and taxation. Because if your employer is using it as a business deduction, then your benefits just became taxable—taking that 2/3 down to approximately 1/2 of your gross pay. While it may be easier to apply through a group, you still have options for disability insurance as an individual.
Just ask us! At Freedom Insurance Agency, we’re a brokerage that specializes in providing customers with full coverage. That’s why we handle everything from homeowners’ insurance to auto insurance, to life and disability plans. Even if you already have a plan, talk to us about supplemental disability coverage that keeps your income at its regular level—even when you can’t work. Protect your investments, and your earning potential, with a little help from our staff of experts! While you can’t plan for everything, this is a good way to start.