How can I handle long-term disability costs without insurance?
A story of triump over adversity has taken the Internet by storm. Rachelle Friedman, a young, beautiful bride-to-be, was rendered paralyzed after a poolside accident during her bachelorette party. Her story, though tragic, is also a story about working past life’s setbacks to realize her goals. Friedman will still have the wedding of her dreams, and will still be able to live her life, even if her mobility is severely hindered.
But while this story serves as a stark and wonderful reminder of the fact that life does go on after disability, it also brings to mind the potential need for disability insurance. What is disability insurance, though? And how can you tell if you truly need it?
Friedman’s case was an accident – a careless and seemingly harmless act of poolside fun that turned quickly to tragedy. But there are others who are exposed far more frequently to risks in their lives. Some jobs, construction for example, come with inherent dangers (including heavy falling objects and potentially harmful power tools). Others expose themselves to extreme injury through their recreational activities. In either of these cases, disability insurance may be a wise move.
Disability insurance is a type of insurance that serves to replace your income if you become unable to work due to accident or illness. It serves as a replacement for a percentage of your earned income – as much as 70% of it – until you’re able to return to work, or until you reach age 67. So you can see how such coverage would be valuable if you are rendered unable to continue working (either for a period of time, in your selected vocation, or at all, depending on the policy).
Aside from having disability insurance, one could – and should – also put together a more general emergency fund, that could serve as a financial buffer during any unforeseen and expensive life event (big or small).
If you need more specific advice about the best options for you, to prepare for any occurrence, give us a call at BeamaLife by dialing (877) 972-3262.
How can I find household help that won’t sink me financially?
As we’ve discussed previously on this blog, hiring household help is sometimes a mere luxury, and other times a necessity. For the sake of this article, we are going to look at this as a matter of necessity.
Say, for example, that one of the breadwinners for a home passes away, leaving the other a single parent with an increased need to generate income for the survival of the household. Or, to lend further legitimacy to this argument, suppose one of the household’s biggest supports (either in a wage-earning or house-keeping capacity) was rendered unable to continue their work due to a disability.
If the life of their partner was insured with an adequate life insurance policy, the benefit paid out by their policy could help ease many costs, from paying for the funeral services to, yes, hiring someone to help share the burden of household duties. The same would apply in the case of someone who is disabled – disability insurance income substitution would come in to help pay for hired household help.
However, if you find yourself without life insurance or disability insurance – or you find you didn’t purchase enough – you may need to find alternate means of both paying for and sustaining household help. Try offering chores to your children for small amounts of compensation, and be sure to spread the love. Teenagers looking to make some extra money may be willing to take on some yard work and babysitting duties in exchange for reasonable funds.
If you’re reading this before tragedy has struck, though, it’s the perfect time to make sure you have the kind of life insurance and disability insurance you need, in case of the worst.
Celebrities in Need of Life Insurance: Part 4
Unlike other celebrities on this list, Tom Brady’s career and his health are reliant upon one another for success. As a star quarterback for the New England Patriots, Brady must keep himself in top physical form at all times. However, considering the frequent impact a quarterback has to grapple with on the field, there is also a great deal of risk involved in Brady’s work. Quarterbacks can, if hit the wrong way, or with force beyond what their body can handle, suffer serious injuries that can result in disability, and even death (especially if the injuries involve the brain).
With a wife and child to support, Brady is another great example of a celebrity who needs life insurance (and not just the kind of life insurance desperate NFL players are purchasing in the face of the lockout).
But Brady also exemplifies the importance of disability insurance – he epitomizes the kind of person who, at any moment, could lose the ability to do his job for good, requiring him to not only find another vocation, but to support his family in the interim as well.
Understanding Disability Income Insurance
As we stated in our previous post, there can be complications with getting disability income insurance through the government. In fact, legislation recently passed through the Wyoming Supreme Court that essentially cuts into the amount a worker can receive in disability if he or she has already received any previous partial impairment awards.
Relying solely upon government assistance when it comes to money matters will generally not yield positive results. No financial plan that puts stake in just one element or entity will do much to protect a person or their family in times of crisis or need. Even if implementing government aid becomes necessary for you, you should do what you can to earn and save money on your own, in addition to outside federal help options. The same principle applies to disability income insurance.
We’ve discussed disability income insurance on our blog in the past, though, to help you navigate your best options for a personal policy.
Disability Income Insurance Month
We’ve reached the halfway point in May, and as such, it seems an appropriate time to highlight another month-long awareness celebration. This time, we are focusing on the fact that May is Disability Income Insurance Month.
Most do not prioritize disability insurance in their lives, and it is to their disadvantage.
Those who feel the government will help may be in for a rude awakening – many who apply are not approved for coverage. According to the LIFE Foundation, only 39% of those who apply for Social Security Disability Insurance were approved for coverage. And that statistic is in relation to 2005 – imagine how claims and rejections have increased since then. In addition, those who were approved generally do not receive adequate coverage to keep themselves and their families afloat in times of need.
Considering the lack of available governmental aid, it would be wise then to check where you are financially. If something were to happen to you that rendered you disabled, would you be able to survive on what you have saved at present?
If not, there are two things you should do. First, you need to save more money – regardless of the danger level inherent in your line of work, you should make sure to have at least three to six months of salary saved up. But also, if you know disability is an inherent risk in any aspect of you rlife, you should investigate the possibility of private disability income insurance.
BeamaLife offers disability insurance options to its customers (in addition to all of the other life insurance and financial planning tools with which we offer help and advice), so give us a call today if you want to know more.
I’m self employed, but I want to get disability insurance. How can I do so without breaking the bank?
It is wise to want to purchase disability insurance for yourself, especially since you are reliant upon only yourself for income. If you’re rendered unable to work by an accident, you don’t have safety nets such as paid sick leave to help in your time of need. And if you’re under the age of 65, you’re very likely to suffer a debilitating injury than you are to die of an unforeseen cause.
Disability insurance could be the one thing that protects you from losing your home or business. Your disability insurance benefits would pay your necessary monthly expenses while you recover, until you’re able to return to work. Consider the fact that your disability insurance may likely be the only source of income you have at this time, and realize that you’re going to need a disability policy with as short of a waiting period as possible. This may mean an increase in premiums, but having those funds available in your hour of need could prove to be well worth the expense.
This insurance would be an expense incurred by you, as your own employer. Your occupation, the location of your work (as in, whether you work from home or in an office), and whether you engage in risky behaviors – as well as other factors – will affect your ability to be covered. Insurance agents will be able to help you find a disability policy that will suit your specific needs and financial goals and limitations.
If I’m self-employed, is there a way for me to still get disability insurance if I need it?
There are ways, and if you are self-employed, it is even more important for you to investigate it than those who fill more traditional employee roles. You won’t have paid sick leave to help you out if you’re injured to the point of being unable to work, so if you don’t wish to drain your savings, or risk your home and business due to financial hardships, disability insurance is a good option.
First, you’ll want to find a policy with as short a waiting period as possible, especially if your business is your only source of income – most policies will give you options around 30 to 180 days after being rendered disabled. Keep in mind, though, that as the waiting period shortens, and the benefit period lengthens, premiums will increase.
Your ability to procure disability insurance is reliant upon factors such as your vocation, the risk factor of your hobbies, whether or not you work from your house or from an office, and other considerations. Contact your insurance agent for help with finding a policy that works for you.
Should I purchase an individual long-term disability insurance policy if I already have one through my employer?
The most important thing, in terms of purchasing insurance, is to make sure you are secure and covered when you and your loved ones need money the most.
First, find out exactly how much disability insurance you have through your employer – if any at all, as not all employers provide disability insurance, especially on a long-term basis – then add that in with the other financial resources you have available (savings, assets, spousal income, property, borrowed money, etc.). When you combine all of these together, do they cover your expenses, should you no longer have your salary to rely upon in the event of a serious accident?
Your financial resources alone probably won’t suffice in a pinch, unless you are independently wealthy. Also, your savings are probably intended for education, retirement, or other goals beyond disability needs.
So look at your job’s group policy carefully to see the monthly benefit, the waiting period, and the overall coverage period they offer. A typical employer-sponsored policy will cover about 60% of your overall income, up to a certain amount. If your job’s income is based on commission and/or overtime, this may not amount to very much. Also, a lot of times an employer will sync their disability policy with their sick pay policy, and require an employee to use their paid sick days before the policy pays out. You’ll need to have cash available in one way or another to cover any potential coverage gaps.
In short, you may want to have an individual policy as well. Should you opt to purchase one, in addition to your work-sponsored one, make sure they coordinate, and will both pay simultaneously, or will work together in other ways to ensure your security at all times.
How can I save on my disability insurance?
First, find out if you can receive disability benefits from a work-provided group disability plan. Generally speaking, group insurance will cost you less than an individual policy. You will sacrifice flexibility in your plan, however, in exchange for the lower premiums. To see what you’re eligible for, talk with your insurance agent, professional association, employer, or state insurance department.
If you don’t have access to group insurance, there are still ways to make disability insurance more affordable for you. First, if you lower the monthly benefit you receive when you become disabled, your monthly premiums will also decrease. Also, you can increase the waiting period for the start of your benefit payment, anywhere from a month to several years, or decrease your actual benefit period. If you lengthen the waiting period, make sure you have emergency savings that will cover your expenses if the need arises. Lastly, eliminate unnecessary and excess coverage.
Take stock of your financial situation before making any drastic decisions, though. Rushing into it could leave you without adequate protection when you need it most. But don’t shy away from purchasing either – some coverage is always better than no coverage at all.
How can I determine if I need disability insurance?
Anyone working for a living probably should at least investigate disability insurance, to protect against a potential inability to meet your financial obligations in the event of a serious injury. Disability insurance will essentially help you take care of your expenses if you become disabled and, as a result, unable to keep working.
There is a very strict definition for disability benefit qualification, to qualify for state/federal aid. So you shouldn’t rely solely upon this sort of insurance for help in the event of injuries that prohibit your ability to work.
Look into group disability insurance at your place of employment – premiums may either be handled by the company, or paid for in part from your paycheck. If your job doesn’t offer disability coverage, or you’re self-employed, you may want to get an individual policy from a private insurance company. Most of them will pay 50%-70% of your gross income, and cover you from anywhere between a time period of several months, and when you reach age 65.
