Why Disability Insurance Because Your Chances Of Becoming Disabled Are Greater Than Your Chances Of Dying.
Below is a MRR and PLR article in category Finance -> subcategory Insurance.
Why You Need Disability Insurance: The Overlooked Risk
Summary
If your income supports you and your family, long-term disability insurance is essential. Discover why protecting against this "forgotten risk" is crucial.Understanding the Risks
Many people don't realize that the chance of becoming disabled is higher than the chance of dying prematurely. Despite this, more people invest in life insurance than in disability insurance. Statistics from the Journal of the American Society of Chartered Life Underwriters reveal that individuals aged 30 to 55 are two to three times more likely to become disabled than to die.
By age 35, you have a 50/50 chance of experiencing a disability lasting three months or more before retirement. Additionally, one in seven workers will face a disability lasting over five years before reaching 65.
Misconceptions About Government Support
Some believe that government programs or Worker’s Compensation will cover them in case of disability. However, over 80% of Social Security disability applicants are denied. Benefits are only provided for disabilities expected to last a year or longer. Worker’s Compensation is limited, covering only job-related injuries and often for just a few years.
The Role of Disability Insurance
Health insurance covers medical bills, but it doesn't replace lost income. Long-term care insurance focuses only on nursing home bills. On the other hand, disability insurance provides you with regular income, helping maintain financial stability when you're unable to work.
Key Features of a Good Policy
When selecting long-term disability insurance, look for:
1. Company Ratings: Choose a company with strong ratings from Moody's, A.M. Best, and Standard & Poor.
2. Policy Terms: Understand the waiting period (elimination period) before benefits start, which can range from 30 to 720 days.
3. Waiver of Premium: Ensure you won’t have to pay premiums if you become disabled.
4. Renewability: Check whether the policy is automatically renewable or if the company can cancel it.
5. Payment Period: Know how long benefits will be paid?"whether it's two years, until retirement, or for a lifetime.
6. Residual Disability Clause: This provides income if you return to work part-time or need to rebuild your business.
7. Recurrent Disabilities Benefit: Covers you without a new waiting period if a disability recurs after recovery.
8. Future Increase Rider: Allows benefits to increase as your income grows over time.
Factors Affecting Costs
The cost of disability insurance varies based on:
- Income Replacement Percentage: Opting to replace 50% of your income, rather than 80%, reduces costs.
- Elimination Period Length: Longer waiting periods cost less.
- Health and Lifestyle: Smokers and women may pay more due to higher claims.
- Job Risk Level: High-risk occupations incur higher premiums.
Final Thoughts
Disability insurance can be complex. It's advisable to consult with a professional insurance agent to fully understand policy details and ensure you're well-protected.
You can find the original non-AI version of this article here: Why Disability Insurance Because Your Chances Of Becoming Disabled Are Greater Than Your Chances Of Dying..
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.