Do I Really Need Disability Insurance?
Why do I need disability insurance? It’s a classic question we all ask ourselves. Most people will own life insurance because we know in the back of our minds that someday, we will pass away. And when that day comes, we want our loved ones to be financially protected. But we can’t seem to get our minds around the fact that we’re at risk everyday of becoming disabled.
Disability can be a disaster to one’s finances. When you’re disabled you lose your earning potential, but you still have living expenses that must be met. Not to mention large expenses for medical care, depending on the extent of your disability.
There are basically two types of disability insurance, short term and long term. Short term typically covers you right from day one, but only lasts only for a 90 day period. This is why most long term disability insurance policies have a 90 day elimination period to them. The assumption being made is that if you have short term, it will start paying from day one, then the long term policy will take over on the 91st day.
Most policies typically will cover up to 60% of your salary replacement. However, this is not always the case, depending on your occupation and what your actual job duties are. You could own a dog grooming business and call yourself the CEO, but if it’s only you and one other partner running the business, who’s going to shave the angry poodle on the day your partner calls in sick? So keep in mind that disability benefits are determined by your occupation and your salary.
We never think about the possibility of becoming disabled, until it happens. Then there is a scramble to rebuild our lives, financially, moving forward. Pause for a moment and ask yourself what you would do if you lost your job today? How would I pay my rent, mortgage or bills? While life insurance is a critical part of our financial planning, don’t forget to investigate covering your risk for a disability.
About the author: Mark Yurkovic has been in the life insurance business for over 12 years, and holds CLTC, LUTCF, and CES designations. He enjoys building remote control boats, and playing instruments including the piano, guitar, banjo, and mandolin. Mark would love to discuss life insurance options and work towards finding the best policy fit for your family. You can contact Mark at 1-800-651-1953 or MYurkovic@Pivot.com.