Do you have an emergency plan in place if you become sick or hurt and cannot work? Even if you are young and physically fit, an unexpected illness or injury can strike at any time. A savings account will only cover so much and may not last long enough. By securing a disability policy, you can eliminate the stress of making ends meet while battling health issues. Before you sign on the dotted line, make sure you ask these important questions.
What is Disability Insurance?
Think of this type of policy as a financial safety net. It helps covers some of your income if you are unable to work due to an accident or illness. Securing a policy at a younger age is not only easier; you’ll pay a lower premium. The cost of policy tends to increase with age or if you have a preexisting condition.
Why Do I Need Disability Insurance?
Most experts agree it’s best to have a savings amount that covers three to six months of living expenses. But what if you have a family that solely depends on your income or what if your employer does not offer disability insurance? This is where the benefit of having a disability insurance policy comes into play. This policy is there to help you pay bills, living expenses and any other day-to-day necessities. Depending on the policy you select, most policies will cover about 60% to 70% of your monthly take-home pay.
What Are the Types of Disability Insurance?
There are two types of disability insurance: short term and long term. While both are designed to help replace some of your income, they do have a few differences. One main difference is the payout period. The short term payout is around two weeks, while it can take a few months for a long term policy to disburse.
How Long Will It Last and How Much Will it Cost?
Short term is designed to provide three to six months of coverage. Long term covers two to five years or more if you continue to have a disability. The cost of most premiums ranges from 1% to 3% of your income. Most experts consider long term disability insurance to be the best option because it’s less expensive.
Being informed about your insurance policy will give you peace of mind in case an accident or serious illness does happen in your lifetime. Get the coverage you need by visiting with the professionals at Care Financial today.
Care Financial is a privately owned and operated business providing families, individuals and businesses with comprehensive wealth management strategies. Contact us online at www.carefinancialonline.com or call us at 251-633-7122.