Individual Disability Insurance: More Important than Ever
Disability insurance is probably the most misunderstood of all types of insurance. Nearly everyone has at least one friend or family member who is collecting a disability check. This creates the impression that if you were to ever become disabled, you would simply go on “disability,” also known as SSI, and collect a check from the government.
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There are two major problems with the misconceptions related to disability insurance. First, collecting a disability insurance check from the government is a complicated process that will take at least two years, and often longer. You must be unable to perform any gainful employment. If you are able to do anything at all that would bring in an income, even if that job would only be available in a completely different geographic location, you will be turned down in your application for a disability check.
Second, the disability check from the government will be a lot less than the income you may be used to living on. However, it may not be low enough for you to also qualify for Medicaid. Eventually, you will get Medicare, but in the meantime you could end up with both health care bills and day to day living expenses that you simply can’t pay. Then you face bankruptcy, loss of your home, and more.
A disability insurance check can provide you with up to 80% of your income. It’s possible that you may have disability insurance at work that will replace most of your paycheck. However, the group disability insurance is another source of misunderstanding.
Usually you will have at least short term disability insurance on the job. This is the equivalent of “sick leave.” You receive the same salary you receive at work, but you may have to obtain a doctor’s note verifying that you were unable to work. If your condition persists beyond the permissible amount of time, you will go on “long term disability” if such is available on the job. This program is paid for by your employer and is through a third party company. It will give you a large portion of your current pay and will continue from a few months to as long as 4 or more years, depending on the company contract. When this runs out, you will be out of luck unless you are old enough to start drawing your social security—or are fortunate enough to begin collecting SSI. No matter how you look at it, a significant gap in income is a definite possibility.
Individual disability insurance, also known as income replacement insurance or income disability insurance, can fill in the gaps, giving you an income until you are old enough for social security. The salary will be from 60% to 80% of your income, depending on what premium you want to pay. Of course, like any other insurance, you can’t wait for a disaster to purchase life insurance. Use our quote service, and see what it would take for you to set up disability insurance while you still have a chance.