Planning For a Better Future

There are no doubts about it - you HAVE tobenefits package. Many employers offer some
have insurance. Law requires homeownerstype of disability coverage, be it 'short-term'
insurance and car insurance in order to retain the(ninety days or less) or 'long-term' (greater than
property associated with each. Insuranceninety days). Any coverage of this type should
companies know you are required to utilize theirfactor into your process of preparing for an
services, and therefore, they charge a prettyemergency.
penny for their product. So, what is a person toAfter taking into account the risk management
do if they are disabled and can no longer pay thethat you already have put into place, you can
premiums required by the insurance companies?make an informed judgment as whether or not
Many people who face this situation are leftyou need additional coverage. If you determine
hopeless, but can prevent this scenario withyour current provisions will not be enough to
disability insurance.support you and your family, you should consider
Social Security Factorspurchasing additional disability insurance. Because
Most people in the United States are of thepremiums and rates increase with age, you will
incorrect belief that, in the event they becomeprobably need to make an immediate purchase
injured, Social Security benefits will care for them.while you are disease and injury free.
The problem is that gaining qualifying to receiveHere are a few factors to consider:
Social Security coverage can be next toHow much disability coverage will I need?
impossible. And even if you DO qualify, theYou should ensure your coverage would maintain
benefits can take much longer to launch thanyour current standards of living, meanwhile taking
expected. If you are to qualify for Social Securityinto account the money you will save on a
benefits, you will be required to provide proof thatcommute, eating out, etc.
you are unable to perform any profession. If you"Elimination period"?
can no longer work heavy construction but youSimply put, it's the quantity of time you will wait
can still push a pencil at minimum wage - it's veryfor your benefits to start up. The classic
unlikely you will get access to Social Securityelimination period for the majority of policies is
benefits.ninety days, which means you should encompass
The Social Security Administration or SSAyour own funds for the initial ninety days of
requires each of the below criteria to be met indisability. You should be certain to arm yourself
full before granting disability benefits.with this knowledge before making any insurance
1. He/She has in incapable of engaging in adecisions.
significant gainful activity (SGA).For what duration will a single policy pay?
2. He/She is incapable as a result of one or moreYou determine the length of time your policy will
medically verified physical or mental impairment.pay based on the policy you choose. Most people
3. He/She has been incapable or is expected tochoose a policy that will cover them to retirement
remain incapable for a continued period of at leastage (about 65 years of age), at which point they
one year or the incapacity is expected to, or willcan take advantage of retirement benefits. If you
result, in death.have no retirement benefits, you may need to
To meet requirements, applicants are required toconsider a different policy.
have worked twenty out of the prior fortyWhat do "own occupation" and "any occupation"
quarters preceding the time of the disability.mean?
Investments and paid sick time are notSome policies specify your disability as the inability
considered gainful income. Conversely, if you fileto perform within your current or "own"
for disability and currently earn greater than 860occupation. This means you will still get the benefit
dollars per month (as of 2006) you will likely beeven though you may be able to work in a
denied claim. Should you be approved fordifferent field. If you select a policy that specifies
coverage, the maximum pay out for a thirty yearthe inability to perform in "any" occupation, you
old adult, who previously earned 70,000 dollars perwill have to provide evidence you are incapable of
year, is a mere 1,600 dollars per month (in mostperforming "any" job before the policy will pay
cases, not even enough to cover a mortgageout.
payment).In 2004 only about 27 percent of income earners
Protect Yourself and Your Familyin the United States had some form of disability
You should take time to closely examine yourinsurance included in their expense budget
emergency funds and liquid assets in order tospreadsheet, at the same time greater than 20
determine your position in the event of a disability.out of 168 million people in the working population
Would $1,600 per month in Social Securityreported some type of disability. The instance of
benefits be enough to sustain your family'sdisability among workers is increasing and
needs? Very likely, the answer is no. In 2004 theinsurance is becoming harder to get. What would
average monthly income per household was 3,700take place within your family if you were to
dollars. According to this data, supplementalbecome disabled for an extended period of time?
income would be required for most families shouldIf you're not absolutely certain your needs would
the primary provider become disabled.be met, now is the best time to make it right.
Take some time to review your employer'sAfter all, tomorrow may be too late.