Individual Disability Insurance: Important Protection for Young Families

Have you hugged your insurance agent yet today? Probably not. Insurance agents may be the most avoided of all sales agents. Families young and old know that insurance is a necessary part of life, but it is human nature to assume that a tragic event will only happen to the "other guy." Although we seek out health insurance and car insurance, we often put off other important types of coverage until it is too late, or our age has made the rates too expensive. read more below. >>

You may think we are talking about Life insurance, and we could be. But if you are under 42 years old, your chances of becoming seriously disabled prior to the age of 65 are four times greater than dying. Furthermore the average age of all disabilities lasting longer than three months is two years. The government is well aware of that "magic" two year period. That period is the reason why it usually takes four appeals and over two years to acquire Social Security disability. It is also why you must be disabled for at least two years before early acquisition of Medicare benefits. And, while you are waiting out the two years to prove to Uncle Sam that you really are disabled, your house gets repossessed, your spouse humbles him/herself and applies for food stamps, your children begin wearing castoffs from wealthier people in your church, you start begging for rides to the doctor (because your car has been repossessed) and a host of other unpleasantries associated with being poor drag you into depression, making your disability that much more difficult to overcome.

Most people associate disability with accidents, but we are living at a time when sickness among young people—caused by cancer, heart disease, diabetes, and stroke—is putting people out of work at a much faster rate than are debilitating accidents. If it happens to you, your life and that of your family will change overnight. Fortunately, while you may not be able to prevent the disabling event, you can prevent the financial devastation that usually follows.

You want Income Replacement Disability Insurance. This is different from the disability provided by your employer. Most larger employers provide short term disability—basically sick leave for no more than a couple of weeks—and long term disability which may be from two to six months. When it becomes clear that you will not be able to return to work any time soon, you will usually be terminated. Private disability insurance usually begins after you have been disabled for 3 months, and, depending on the terms of your policy, continues until you are able to return to work, or until you reach the age of 65, whichever comes first. Furthermore, you need not have one foot in the cemetery as often seems to be the case with SS disability. You simply need to be unable to perform the duties of your regular job.

The amount you can collect under a private disability policy is determined by your average salary over a three year period and on the percentage you choose via your premium. You can choose to collect from 40% to 80% of your salary. The money comes to you tax free, which is the reason for the 80% limit. You don't bring home 100% of your working salary because taxes and Medicare take about 20% off the top.

The money comes directly to you, not to a health care giver or bill collector. Hopefully, you will contact your insurance agent and ask about disability insurance before you have to face bill collectors, anyway.

You can find out how much a policy might cost you by filling in the online quote request form above.

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