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Your overall financial strategy should probably include a disability insurance policy. These policies give you an income if you become disabled and are unable to work. They ensure your earning power. Most disabilities arise from a medical condition. Sometimes, they are associated with aging, but often the medical problem is caused by an accident or some other unforeseen problem. It makes sense to be protected.
How much do you need?
Proceeds from a disability policy are generally tax free if you pay the premiums. However, if your employer provides coverage, you will have to pay tax on them and may want a higher level to cover the taxes.
Guaranteed renewable or non-cancelable - These words are important. They both mean that you cannot be dropped because of poor health. However, guaranteed renewable usually does not mean the insurance company cannot raise its rates. Make sure to read the terms of the policy carefully.
Waiting period - This represents the time you must wait after you are disabled and before you can start getting benefits. Many policies offer different waiting periods from 30 days to a year. The shorter the wait, the higher the premium. If you have other assets you could use for living expenses for a period, you may want to consider the longer waiting period with the lower premium.
Insurance company financial status - Be sure to check out the insurer. While there may be some form of state insurance fund protection, if your insurance company has financial difficulties, it may create some hardships for you. You can often find insurance ratings at your library or on the Internet. You can also ask the insurance agent for a report from a ratings agency.
Getting disability insurance
Determine how much and what kind you need. Check your employer's benefits program for availability. Make sure you have the protection you need.����