DISABILITY
According to the "Why Disability" booklet published by National Underwriter, men have a 43% chance of becoming seriously disabled at some point throughout their working years, and women have a 54% chance. This accounts for why Disability Insurance is important because the benefits are used to replace the loss of income that occurs when a wage earner becomes disabled.

In most cases, a disability can become more of a financial hardship than an untimely death because unforeseen increased expenses (medical) often go with the loss of income. It is important to be able to distinguish between short-term and long-term disability periods:

Short-term vs. Long-term Disability:
1) Short-term disability- provides coverage for up to two years. Policies typically state the coverage in a number of weeks covered.
2) Long-term disability- coverage provided after the first two years of disability pass. The insured can select policies that have benefit periods that pay till age 65, for a selected number of years, or for life. The longer the period, the more expensive the premiums.

Disability insurance is income replacement insurance; therefore, the monthly benefit amount must be appropriate in comparison with the insured's current income- approximately 60-70% of gross pay. The coverage should be suitable to include both sickness and accidents. If the policy has a coordination with Social Security disability benefits provision, that fact should be considered in the selection process.

POOR HEALTH
One major concern in our country is the rising costs of medical care for employees and their families. Many employers are adopting plans that have higher deductibles and co-pays to help pass some of the cost of insurance down to the employees. Should you decided not to purchase health insurance, you could be facing the risk of high costs of medical expenses, doctor visits, hospital stays, and many other expenses that are typically covered thru the use of medical insurance. Insurance for this protection can be obtained either privately or through the government programs:

Private Health Insurance
Private health insurance is coverage by a health plan provided through an employer or union or purchased by an individual from a private health insurance company.

Employment-based plans
Employment-based health insurance is coverage offered through one's own employment or a relative's. It may be offered by an employer or by a union.

Direct-purchase plans
Direct-purchase health insurance is coverage though a plan purchased by an individual from a private company.

Government Health Insurance
Government health insurance includes plans funded by governments as the federal, state, or local level. The major categories of government health insurance are Medicare, Medicaid, the State Children's Health Insurance Program (SCHIP), military health care, state plans, and the Indian Health Service.



Unemployment Risks

Related Articles
  1. Personal Finance

    Tips for Insuring Your Salary

    Those with high incomes really can’t afford to be without disability insurance. Here's why.
  2. Trading

    The Disability Insurance Policy: Now In English

    Learn to translate this complicated policy so you can rest assured you're covered.
  3. Investing

    Advising FAs: Explaining Disability Insurance to a Client

    Disability is a very critical type of insurance that most individuals should consider carrying. When it comes to your personal finances, long-term disability can have a devastating effect if ...
  4. Trading

    Choosing The Best Disability Insurance

    Social Security benefits can be hard to collect. Find out why you need disability insurance to protect your income, and learn how to choose the right policy for you.
  5. Personal Finance

    How to Protect Your Income No Matter What

    What does it mean to insure your income? Here are a variety of ways to do it and some insights into when it might make sense to invest in income insurance.
  6. Markets

    Disability and Business Overhead Coverage for the Self-Employed

    What every small business owner or professional needs to know about individual and business overhead disability income insurance plans.
  7. Retirement

    Group and Individual Disability Insurance: What You Need to Know

    What you need to know about group and individual disability income coverage.
  8. Personal Finance

    4 Types of Insurance Everyone Needs

    Most experts recommend four types of insurance to provide a measure of protection from the unexpected: life, health, auto and long-term disability.
  9. Retirement

    Top 3 Financial Steps to Take on Disability

    Going on disability can be a stressful time financially. Here are 3 steps to take on disability to help protect against significant financial blowback.
  10. Personal Finance

    7 Mistakes to Avoid When Buying Health Insurance

    Understand the need for health insurance and why some undervalue the need for coverage. Learn about the top seven mistakes to avoid when purchasing insurance.
Trading Center