Disability Income Insurance - Buying on a Budget
Disability Income insurance is arguably one of the most important types of insurance a person can carry.
It protects a person's most valuable financial asset, which is his/her ability to earn an income.
Most people have auto insurance, home owner's insurance, Liability insurance and some even have Life insurance, but most people never think to insure the one thing that makes everything else possible - their income.
Disability insurance protects your income in the event of a debilitating injury or illness preventing you from being able to work.
It provides a monthly dollar amount for each month that you remain unable to do your job because of an injury or illness.
Since there are so many uncertainties associated with injuries and illnesses, there are many different options to consider for personal Disability policies.
A policy can be designed to begin paying benefits after 30-days, 60, 90 or even longer, and may pay for a 1-year benefit period or stretch all the way out to age 65.
Some options are priced better than others, but regardless of price, there are many options available.
Although everyone would prefer to have a policy that begins paying the quickest and continues to pay for the longest, the reality is that pricing is a big factor in a person's decision making.
Many people who are interested in purchasing disability insurance will experience an initial sticker shock because the cost is sometimes more than people expect, especially for women.
Do not allow the initial cost to turn you away from protecting yourself, your family and your future.
There are many ways of reducing the cost of Disability insurance in order to fit a specific budget.
The one thing you should not do is downgrade the quality of the contract or company you work with.
What good is having Disability insurance if it doesn't end up paying you when you need it? Instead, consider the following two options: The benefit period of a disability policy can affect the pricing fairly significantly.
Depending on your age and situation, it may make more sense to go with a reduced benefit period such as a 5-year or 10-year.
Although it is better to have some coverage than not having any coverage, people should be cautious on how short of a benefit period they select.
Be aware that the average long-term claim is just under 3 years.
A preferable source of reducing pricing is through the use of a Future Increase Option rider.
This will not be available for everyone and normally only makes sense for someone 50 years or younger.
Rather than reducing the benefit period, you can reduce the benefit amount and replace it with a Future Increase Option, which enables you to increase your policy benefit in the future regardless of any changes in health.
Although this does not provide the full need you have, at least it provides a majority and allows for increases in the future.
Additionally, it eliminates the concern of limiting benefit periods.
It is fair to state that the average person would rather 80% benefit for the full claim period than 100% for 20% of the claim period.
Again, depending on age and exact situation it is likely that a longer benefit period is in a person's best interest.
We've already noted that a person's ability to earn an income is very important.
When looking to protect something so important it is better to have some coverage than no coverage.
Part of protecting your income with Disability income insurance is establishing a budget and obtaining what you can within an affordable means.
The worst thing a person can do is not have any coverage at all.
It protects a person's most valuable financial asset, which is his/her ability to earn an income.
Most people have auto insurance, home owner's insurance, Liability insurance and some even have Life insurance, but most people never think to insure the one thing that makes everything else possible - their income.
Disability insurance protects your income in the event of a debilitating injury or illness preventing you from being able to work.
It provides a monthly dollar amount for each month that you remain unable to do your job because of an injury or illness.
Since there are so many uncertainties associated with injuries and illnesses, there are many different options to consider for personal Disability policies.
A policy can be designed to begin paying benefits after 30-days, 60, 90 or even longer, and may pay for a 1-year benefit period or stretch all the way out to age 65.
Some options are priced better than others, but regardless of price, there are many options available.
Although everyone would prefer to have a policy that begins paying the quickest and continues to pay for the longest, the reality is that pricing is a big factor in a person's decision making.
Many people who are interested in purchasing disability insurance will experience an initial sticker shock because the cost is sometimes more than people expect, especially for women.
Do not allow the initial cost to turn you away from protecting yourself, your family and your future.
There are many ways of reducing the cost of Disability insurance in order to fit a specific budget.
The one thing you should not do is downgrade the quality of the contract or company you work with.
What good is having Disability insurance if it doesn't end up paying you when you need it? Instead, consider the following two options: The benefit period of a disability policy can affect the pricing fairly significantly.
Depending on your age and situation, it may make more sense to go with a reduced benefit period such as a 5-year or 10-year.
Although it is better to have some coverage than not having any coverage, people should be cautious on how short of a benefit period they select.
Be aware that the average long-term claim is just under 3 years.
A preferable source of reducing pricing is through the use of a Future Increase Option rider.
This will not be available for everyone and normally only makes sense for someone 50 years or younger.
Rather than reducing the benefit period, you can reduce the benefit amount and replace it with a Future Increase Option, which enables you to increase your policy benefit in the future regardless of any changes in health.
Although this does not provide the full need you have, at least it provides a majority and allows for increases in the future.
Additionally, it eliminates the concern of limiting benefit periods.
It is fair to state that the average person would rather 80% benefit for the full claim period than 100% for 20% of the claim period.
Again, depending on age and exact situation it is likely that a longer benefit period is in a person's best interest.
We've already noted that a person's ability to earn an income is very important.
When looking to protect something so important it is better to have some coverage than no coverage.
Part of protecting your income with Disability income insurance is establishing a budget and obtaining what you can within an affordable means.
The worst thing a person can do is not have any coverage at all.