THE INSURANCE SERIES | PART 3

Today, let’s talk about disability insurance.  I find that this is a common missing piece to many of my clients’ financial puzzles.

If someone is dependent on your income, or you are dependent on theirs, and there aren’t enough assets to cover everyday costs should a disability take that income away, you may be a candidate for purchasing disability insurance.  

The chances of missing work for an extended period of time due to an injury or illness may seem small, but in reality, but according to the SSA, one in four adults will miss more than 90 consecutive days of work for this reason by the time we reach 67.  You have to ask yourself, could you afford to miss these paychecks.

There are two types of disability insurance, short term and long term.  Both will pay a portion of your income, up to a cap or limit.  Policies also differ in how they define disabled.  Some policies will only pay if you can’t perform ANY type of work, and others will pay out if you can’t work the job in which you are qualified for.  Some policies will pay if you are partially disabled, and others will only pay out if you are completely disabled.  It’s important to understand all of these details when you sign up or purchase coverage.

A variety of factors will affect how much you have to pay for this type of insurance: your age, your health, your income, if your job is classified as one that results in a large number of injuries, how long your policy agrees to pay the benefits, and how long you have to wait before receiving benefits.

There are a few ways to obtain disability insurance:  your employer may cover some or all of the costs, or you may also be able to purchase disability through your workplace if it is not offered free of charge.  If you belong to a professional association, you can look into purchasing it this way, or you can purchase a policy independently through an agent.  

You will want to make sure you are clear on exactly what your policy covers, and how much of your income it will replace.

If you have a disability policy, and you aren’t sure what it covers, please reach out to me, and I am happy to take a look at it.  If you think you may be a candidate for disability insurance, but you aren’t quite sure where to begin, you can also reach out to me to get started!  This is something I provide for my clients.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you discuss your specific situation with your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.