Protect Your Income With Disability Insurance: A Comprehensive Guide
Imagine being struck by an illness or injury that leaves you unable to work for months, or even years. How would you pay your bills and maintain your lifestyle? This is where disability insurance comes in. In this guide, we’ll take a close look at why disability insurance matters, how it works, and why it’s so important to make it part of your financial planning. It’s about protecting your income.
Understanding Disability Insurance
What is Disability Insurance?
Disability insurance is an income protection insurance that pays a benefit if you can’t work because of injury or illness. It helps replace your income while you’re not at work and allows you to concentrate on getting well.
Types of Disability Insurance
Short-Term Disability Insurance: covers a prescribed period (up to six months) of disability, replacing part of your salary if you’re temporarily unable to work.
Long-Term Disability Insurance: Long-term disability benefits are applicable for a sustained period – often until retirement – when the disability is more severe and/or permanent.
How Disability Insurance Works
Assessing your needs: How much cover do you require? Take stock of your circumstances: have you got a mortgage (or rent), utility bills, groceries, a partner, and children? These will all need funding in the future should the worst happen to you.
Coverage Options: Choose your coverage level based on your budget and needs. Work with an insurance professional to understand the policy, including waiting periods and benefit amounts.
And you hold up your end of the bargain, by making regular premium payments: Premium Payments: Make the premium payments necessary to maintain your continuing ability to receive disability benefits. Generally, the premium paid will depend on age, occupation, health and other factors.
File a Claim: If you qualify, file a claim with your carrier. The claim process requires submitting medical evidence and evidence of your disability affecting your ability to work.
Benefits granted: You must be found disabled in order to receive benefits under your policy. If you’re found entitled to benefits, they’ll continue to pay those benefits on the schedule outlined in your policy. This is typically some percentage of your salary before you became wounded or sick.
The Importance of Disability Insurance
Income Protection: By buying disability income insurance, you make sure that you can still provide for yourself in the unfortunate case of disability, when you cannot make a living.
Financial Stability: With disability insurance in place, you can feel secure that you will be able to pay your bills and other expenses, without having to direly deplete your savings or retirement funds.
Peace of mind: You can concentrate on getting better, knowing that your finances are covered.
Disability insurance is the final piece of the puzzle for successful financial planning. It protects your paycheque in the event that you lose your ability to work due to a medical condition. It can help you and your family weather the financial storms of life when you can’t go to work because you’re ill, injured or impaired. With so many different policies available, it’s important to take some time and explore the different types of disability insurance to better understand your options. Once you’ve taken the time to work out where you stand, an insurance professional will be able to explain the different disability insurance policies that are available and make a recommendation for coverage based on your budget and goals. Once you have the right disability policy in place, you’ll face the financial uncertainties of life with confidence, knowing you’ve taken proactive steps to protect your paycheque, your work and your income.
