INSURANCE >> DISABILITY

Disability Insurance

Disability (or loss of income) insurance covers you in case you cannot work because of illness or injury. Disability policies typically insure 40 to 60 percent of your gross income. Look for insurance that covers you against an inability to perform your current occupation, since many policies may pay benefits only if you can not do any work at all. Policy provisions can vary greatly so research carefully.

Disability coverage is extremely important for a one-person business, since a sudden illness or injury that prevents you from working can put the survival of your company at stake. To get disability insurance, you may need to convince an insurer that your one-person business is stable, so be prepared to show a record of growth and consistent revenues through long-term contracts, certified financial statements, and other documents. In some cases, if you want to cover yourself for disability, you can also set up your company as a corporation, and cover yourself with workers' compensation.

Disability insurance issues:

• Take a group policy if it's offered, but it's better to have an individual disability policy, too.
• Always look for "own-occupation" coverage.
• The most you can reasonably hope for is coverage that pays benefits until age 65
• Take a close look at the fine print on exclusions and restrictions, particularly if the policy premium seems too good to be true.

The amount of benefit you receive is also typically at your discretion. Most often, coverage is a “flat amount” and/or a percent of your salary. For instance, you may have the option to select a flat amount of $2,000 a month, up to a maximum of 50% of your monthly salary. Premiums for your coverage will vary based on your benefit selections.

Benefits remain in force as long as your disability renders you unable to return to work; however, most policies limit the duration benefits will be paid. If you are unable to return to work in your own occupation, benefits will expire after a couple of years. But if you are unable to work due to a more serious injury or illness, benefits may last through the age of 65. Specific details of these severe disabilities are included in the policy.

In addition to simply providing lost income, many plans today include benefits for services that help you get back on your feet and back to work. Such added benefits may include Return-to-Work Assistance, where you can receive help getting back to your current position. Or, if returning to your previous job is not possible, Vocational Rehabilitation Services may be available to help train you for a new job.

When looking to protect yourself and your family from an unexpected disability, be sure to look for the coverage you need. How much are your monthly expenses, and will these be covered in the event you are cut off from your salary? How long will the coverage be in force should you suffer a disability? Is there extended coverage for severe disabilities? What additional benefits are included – aside from a monthly benefit – to help you get through a disability?

Don’t allow yourself to be unprotected. Find out how you can keep your financial future safe by investing in long term disability coverage.

At My Twin Cities Home we will search a variety of companies to try to get you the best policies for your needs. We work with lots of different providers so you have a great selection of what is available in the marketplace.