What is the purpose of disability insurance?
Have you ever known someone who experienced medical complications that left them unable to work for months or years? It’s hard to watch them struggle to make ends meet when going through such difficult times. It’s even harder to imagine if it were you or your close relatives.
What would losing income mean for you? This could be stressful and frustrating. Fortunately, you can solve this financial problem by getting disability insurance. This type of insurance coverage offers protection if you lose some or all of your income when you become disabled and are unable to work. When you’re younger and healthier, it’s easier for you to secure a disability insurance policy.
The premiums on disability insurance policies will increase as you get older. If your health deteriorates, it may become hard for you to qualify for affordable coverage. The policy doesn’t just cover freak accidents. Most claims are due to conditions such as cancer and heart attacks.
If you have a qualifying condition, you may also be able to get Social Security Disability (SSD) insurance, which is also known as Disability Insurance Benefits (DIB). With this type of coverage, you won’t have to pay premiums at all. The only thing you’ll need to do is apply and go through the approval process. Visit this site to see the list of impairments for adults.
Reasons Disability Insurance Is Important
Whether you’re considering applying for DIB or you’re considering getting a disability insurance policy through an insurance company, it can go a long way toward improving your quality of life if you should become disabled. The following are some of the reasons getting coverage is important.
Supplementing Employer Coverage
Many companies provide disability insurance. However, most policies only cover about 60% of the employees’ salaries and limit the benefits to between $5,000 and $10,000. As a result, if you become disabled, you may still need additional income to cover your bills. Disability insurance policies can be excellent supplements to your employer coverage.
Protecting Your Future
You are living your life to enjoy it and make memories. What happens if you become disabled and don’t have a disability insurance plan? It means you will stop your 401(k) and other savings. Losing your income means you will end up withdrawing your IRA and other types of savings. By doing so, you may not end up with the future you’d envisioned. When you have the right disability income policy, your future will be intact.
Protecting the Breadwinner’s Income
Disability insurance is important for people whose job is their largest financial asset. The coverage offers you protection against income loss and for your dependents. If you provide financial support for your children, spouse, parents, or any other person, disability insurance helps to ensure that you’ll get the help you need if you’re unable to work.
When applying for coverage, you will be allowed to choose how much money you would want to receive every month and the preferred duration. This means you will have money to cover your family’s needs.
Helping You Pay-Off Debt
Many people are deep in debt, mainly from credit cards and student loans. If you owe some money, that doesn’t go away if you become disabled. The lenders will still expect you to find a way to pay. This principle also applies to mortgages.
If you’re required to make huge monthly payments, income loss can affect your ability to pay them on time. Factoring your monthly payments in when calculating the coverage amount can help you to avoid getting behind on your mortgage and other bills. With disability insurance, you will get enough money to repay your debts.
Helping to Maintain Your Lifestyle
You have a house, a lifestyle, and other possessions. All of these may be gone if you lose your income due to disability. When you have injuries or become disabled, your income will start depleting. Choosing the right disability insurance will enable you to maintain your current lifestyle.
What You Should Consider When Choosing Disability Insurance
Before you apply for disability insurance, take some time and assess your risk. Consult several insurance agents to help you understand your unique needs. Failure to do so could mean you would end up paying premiums for risks you don’t have.
When you attain the retirement age, consider dropping the insurance plan. Note that insurance providers do not pay if someone has already reached the retirement age. Age is a critical consideration when buying these policies, but it won’t affect you as much if you go through the Social Security Administration.
There are three age brackets with different DIB eligibility requirements. You can follow the link to learn more about the requirements and how you apply for these benefits.