The Social Security Administration estimates that more than a quarter of all 20-year-olds will become disabled before reaching retirement age.[1] What would happen to your finances if you got badly hurt or were not going to recover from a long-term illness? Disability insurance is designed to protect you from income loss when a covered condition prevents you from working.
If you fell and broke your arm, accident insurance might provide a one-time cash payment to help with co-pays you incur for immediate treatment. But if your broken arm kept you from doing your construction job, you might need to file a claim for short-term disability benefits to replace your income on a weekly basis. While there is a distinct difference between these two types of insurance, they can certainly complement each other in case of a covered injury.
Disability insurance is available through both private insurers and the Social Security system. Premiums vary depending on a plan’s terms and conditions but typically cost 1-3% of a policyholder’s annual income.[2]
You should take note of these factors when considering a disability insurance policy:
- The elimination period, or the length of time a policyholder must wait after becoming disabled before they can begin receiving benefits
- The benefit period, or how long payments will be made under the plan
- The strictness of the policy’s definition of “disability”: Social Security, for instance, requires you to demonstrate that your disability is expected to last at least 12 months or is expected to result in death.
Contact [Mark Heath Financial] today to discuss the right insurance coverage for your unique needs.
[1] https://www.ssa.gov/disabilityfacts/facts.html
[2] https://www.policygenius.com/disability-insurance/long-term-disability-insurance-vs-social-security-disability-insurance/
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