Learn how disability insurance works

Short Term Disability Insurance for the Self Employed

Filed under: Disability Insurance — Alston @ 12:39 am January 20, 2012

There are many insurance companies that offer short term disability insurance for self-employed men and women. These are policies that tend to pay an income shortly after the onset of a disability but they will only pay a short-term benefit.

Money received after filing a claim can make a huge difference to a family with a disabled member. However, by definition, the benefits of a short-term policy are temporary.

The small business owner, who will have no source of income after their disability insurance coverage stops paying, may try to go back to work too early. This can jeopardize their health. The effect of an injury or illness can make returning to work impossible or unwise for many years.

In some cases Social Security may pay a benefit to an individual. However, this typically takes at least twenty-four months and qualifying is difficult. You can pay lower rates if you purchase a short term policy because you believe that Social Security will pay you a benefit. However, the money saved may not justify the lack of protection if the government doesn’t come through for you.

The same companies that offer short-term plans usually sell policies that will cover a long-term disability. This gives many the opportunity to continue to get the care they need to heal more fully from their injuries or illnesses.

The premium paid each month for a long-term disability policy will be higher than for a short-term plan. However deciding to buy better coverage lengthens the period of time you are paid by the insurance company if you have a long term disability. This can make you glad that you paid the extra money.

It is important to note that this coverage is available to the individual who may be self-employed. Many erroneously believe that it can only be purchased by workers from their employers. Although programs available through jobs are often available to all regardless of their medical history, a healthy person will typically be able to qualify for an income replacement plan.

One financial benefit to purchasing a personal policy is that you are more likely to receive benefits without taxes taken out. (This information should be checked with a tax professional because your situation may not be typical.)

Often when a policy is purchased through an employer, the policy is lost when the employee decides to leave that employer. This is usually not a concern for the small business owner.

Purchasing a disability insurance policy can help you continue to stay in your home and continue to provide for your family. Don’t wait another day before you get quotes for disability insurance.

What is Own Occupation Disability Insurance?

Filed under: Disability Insurance — Alston @ 1:19 am September 24, 2011

Once you start receiving benefits from a disability insurance company, you will continue to receive your replacement income check until one of two things happen. The benefit period listed on your contract can expire. You can be healthy enough to return to work.

Being able to return to work can mean that you are able to do a job for which your education and experience suit you. This can mean that your benefits can end based on your ability to do a job that you do not want to do.

Depending on your profession you may need the added protection offered by the “Own Occupation” clause.  If you are a surgeon, but don’t want to become a general practitioner or a college professor you may benefit from this policy provision.

If you have concerns about this issue, you will need a policy with an Own Occupation clause. This means that you are considered disabled until you are able to do that job or you voluntarily take another different job.

Choosing the Maximum Benefit Period for Disability

Filed under: Disability Insurance — Alston @ 10:02 pm September 19, 2011

Disability insurance policies come with several options. One of those options is the maximum length of time that the policy will pay during a disability.

This is one of the most important aspects of any long term disability insurance plan. The longer the term you are eligible to receive benefits the better it will be for the insured should he or she have a long term disability. However, this raises the premium of the policy.

You trade an increase length of time you can expect the insurance company to continue paying benefits to you in exchange for the amount you will be paying for your monthly insurance bill.

On many policies increasing the period a policy will pay dramatically increases the cost. This can make this a difficult decision. Hopefully the information provided in this blog post will help you make a more informed decision.

Many insurance agents feel that a much better way to reduce costs is to increase the waiting period. The waiting period is the period of time the insured has to wait after the onset of his or her disability before he or she is eligible for a disability payment.

Including disability insurance in your financial plan is as important as any other insurance contract. Coverage for disabilities is crucial if you work for a living. Few things are as fragile as good health.

An accident, disease or other medical emergency can end your ability to work and bring home a paycheck. Your personal expenses are likely to continue long after you are unable to work.

The cost savings associated with increasing the waiting period by a few months can be equal to increasing the payment period by years or decades. This often makes increasing the waiting period a much better choice.

Loss of Income Insurance Protection

Filed under: Disability Insurance — Alston @ 12:42 am September 13, 2011

Of all the types of insurance policies, few are as important as disability insurance. For most of us everything we purchase is paid for by our earned income. Losing our ability to earn an income therefore affects any person’s quality of life to say the least.

Business owners have special needs in regard to disability insurance. Disability insurance for self-employed persons must be purposely sought out by the business owner. It will not be part of a package offered by, and passively received from, his or her employer. All such financial arrangements must be made by the business owner himself or herself.

You can get quotes for a personal or business loss of income insurance policy on this site.

Disability insurance coverage provides protection against a loss of income caused by a covered sickness or injury. None of us know when we or if we are going to have a heart attack or a major accident. It is prudent to have good insurance protection for a loss of income.

Many policies allow the insured to receive as much as seventy percent of their previous income in benefits. Since disability income benefits can be received on a tax free basis, this seventy percent can be close to the insured’s previous post-tax income.

As a general rule if the premium payments for your policy are made with post-tax dollars, the payments you receive in benefits are not taxable. If your employer pays for your premiums, you may have to pay taxes on the benefits you receive when you file a claim.

You can impact the amount of your payments in several ways. The amount of the benefit you want paid to you, the length of time you want to be paid and the length of time (after the onset of your disability) you are will into wait until you receive you receive your first disability payment all have impact.

Your health also impacts your premium. Smoking or using tobacco also has an impact. Being a good risk means paying a lower premium.

You can request more information, including prices, from this website. Disability insurance or loss of income protection is very important unless you have enough savings and investments to maintain your lifestyle without earning a living.

Can You Buy Disability Insurance When You Are Sick Already?

Filed under: Disability Insurance — Alston @ 11:05 pm April 30, 2011

If you are currently disabled, you will not be able to buy a disability insurance policy. However, being sick doesn’t automatically preclude your being able to purchase a policy.

If you have a condition like high blood pressure, but are not currently disabled, you may be able to purchase a disability insurance policy. You may pay more than someone who does not have the condition, but there is a good chance that you will qualify for a policy if you are otherwise in good health and your pressure readings aren’t too high.

With certain health conditions, your insurance company may place an elimination rider on the policy that keeps them from paying if you are disabled due to that specific condition. If you have glaucoma a policy might be issued, but disability caused by blindness might be excluded by a rider.

Riders are often used when the effects of the medical condition is limited to a certain part of the body. However, if you have a medical condition like high cholesterol where the effects can manifest themselves in a variety of ways, the insurance company will not have the option of adding a rider to your policy. They will likely increase your premium or deny the application.

It is important to buy disability, life and health insurance before a sickness occurs. Otherwise, you may face paying a higher premium, owning a policy that gives you less than full protection or being denied entirely.

Characteristics of Disability Insurance

Filed under: Disability Insurance — Alston @ 4:14 pm April 26, 2011

Disability insurance replaces a portion of earned income when an individual is unable to work due to a covered sickness or a covered accident. Disability insurance has certain characteristics that aren’t found in other policies.

Disability insurance uses something called an “elimination period” or a “waiting period” to allow the policy owner to take more or less of the risk on their own shoulders. The more risk the insured takes on the lower his or her premium will be when they purchase private disability insurance.

The waiting period is the period of time one needs to be disabled before they are eligible for benefits. If you are disabled (per your contract’s definition) for three months and have a two month waiting period, you can claim benefits for the third and subsequent months of your disability.

If you continue to be disabled, you can continue to receive a benefit check each month thereafter. With most contracts, if you recover and are not disabled for a period of six months or more your elimination period will come into play again if you become disabled again.

(Auto and homeowners policies also allow policy owners to manage risk retention. On these types of policies this is done by raising or lowering the deductible.)

Another characteristic of disability policies not found in other policies is the maximum benefit period. This gives the policyholder another form of risk retention management.

The maximum benefit period is the longest period of time that you can receive benefits. This can be based on a maximum number of years. It can also be based on a maximum age.

Some policies will pay for a maximum of 2 years or 5 years. Others will pay you until you reach a certain age. That age is typically 65 or 70.

Other characteristics associated with disability policies are the unique riders that are available. These riders include:

  • Waiver of Premium Rider
  • Social Insurance Rider
  • Cost of Living Adjustment Rider
  • Guaranteed Purchase Option Rider
  • Return of Premium Rider

These riders will be covered in future posts.

Disability Insurance and the Self-Employed

Many disability insurance companies cater to the self employed. This is because self employed individuals are almost always in need of this coverage.

If you are self-employed, you have to build your own benefit package. Although you may receive your medical benefits from your spouse’s employment it is unlikely that you will be covered for disability.

Should you purchase private long-term disability insurance?

Everyone who needs to work for a living should seriously consider owning disability insurance. What will happen to your family if you could never work again?

What Is A Disability Insurance Elimination Period?

Filed under: Disability Insurance — Alston @ 4:23 am April 20, 2011

An elimination period for disability insurance serves the same purpose as a deductible in a health or auto insurance policy. It is a way for the insured to take some of the risk away from the insurance company in exchange for a lower premium.

An elimination period is also known as a waiting period. You will have a period of time that you will need to wait after you have a qualifying disability before you start accruing benefits.

It is important to note that you will not receive disability insurance benefits immediately after your elimination period has been satisfied. If you choose a disability policy that has a three month waiting period, you will probably not receive benefits until after over four months has elapsed.

This is because when you have been disabled for 91 days you will have only “earned” one day’s worth of benefits. After you have been disabled for 120 days or so, you will be able to file a claim for benefits.

(This delay also means that should your disability end and you get back to work, you will receive one or two months of payments after you have recovered.)

You will get the best value by selecting the right elimination period. A policy with a 30-day elimination period will probably be more expensive than the additional coverage is worth. However, a 365 day elimination period can mean that your family will suffer for too long without your income. For most people an elimination period of 60, 90 or 180 days will help them achieve the right balance between cost and benefit.

Disability insurance is one of the most important types of insurance coverage. Be sure to purchase adequate coverage to make sure that your income doesn’t stop if you have an accident or develop health condition that keeps you from working.

Self Employment Disability Insurance

Filed under: Disability Insurance — Alston @ 7:56 pm February 25, 2011

Disability insurance can replace most of your income when you are sick or injured and unable to work. What kind of insurance is more important?

Some people mistakenly believe that certain types of personal insurance are only available as part of a benefits package offered through employers. Fortunately this information is false. In fact individual or self employment disability insurance can be cheaper.

Some people also believe that Social Security benefits will take care of them when they are disabled. It usually takes years to qualify for the Social Security program. The benefits are low. Most people are denied when they request benefits.

Workers compensation sometimes pays a benefit. However, workers comp will only pay if your disability is job related.

The benefit money you get from a claim filed on an individual disability insurance policy is just a spendable as money you might get from a group policy. In fact without this money, many people would have had their homes foreclosed. (More people lose their homes because of a lack of health and/or disability insurance than those who lose their homes due to a layoff.)

The money can be more spendable, actually. Disability insurance income isn’t taxable when purchased by individuals in most cases.

Disability insurance is available to pay the self-employed as well as to other individuals who are not affiliated with a large employer. It is often available to the selfemployed at a very affordable rate.

Insurance that you purchase on your own, like disability insurance is often not only less expensive but it is also more portable. Both of these facts can mean that you get a better deal when you purchase a policy for yourself.

Group disability insurance is often available with no medical questions asked. You can qualify based on information such as your employee status, your pay and the number of hours you work. Since the insurance company doesn’t get to ask you medical questions, they charge the sick and the healthy based on the same claim expectations.

This can mean that those who are healthier are overcharged. Because of this some people are able to get a lower rate by purchasing long term disability insurance for individuals.

An even more important issue that price may be portability. When disability insurance policies are tied to jobs, the policyholders are actually the employers. This means that you can lose the coverage if you leave your job and if you are in ill health at that time, you may not qualify for an individual policy.

Buying insurance through employers also means that you have less choice regarding the plan’s design and the benefit. When you purchase as an individual whether self employed or not, you will have more plans, plan types, providers and options to choose from.

You may also find that no income taxes are taken out of the money received when you file a claim. (You are likely to have income taxes taken from your disability income check if a business paid for the policy.)

This is not the case with individual disability insurance. Since your coverage is not tied to your employment, you stay protected even if you switch jobs or decide to opt for self-employment. This means that if you get sick while between jobs, you may still be able to file a claim.

This means that if you are less healthy five years from now, you can still maintain your protection. This isn’t necessarily the case if you purchase the coverage through one of your jobs.

The coverage a typical benefits package people typically get from large employers can be duplicated or nearly so, by the self-employed. You probably already know that companies like Blue Cross will sell health insurance to you directly. Companies that offer disability insurance will also sell and will pay claims to individuals including the self-employed.

You can find prices and information regarding disability insurance for the self employed on our site.

Should You Buy Private Short Term Disability Insurance?

Filed under: Disability Insurance — Alston @ 5:21 pm February 18, 2011

Buying a private disability insurance plan can replace lost income when a medical condition or an injury keeps you from going to work. It can really pay off and greatly add to your financial security. However, short-term plans have a major and obvious flaw.

They are short-term answers to a potentially long term problem. This means that by purchasing such a policy is a gamble. If you are disabled and are able to go back to work after a short period of time your gamble would have paid off. However not everyone’s health improves quickly enough to make this a good solution.

If you are not able to get back to earning an income before your policy stops providing benefits you will have real problems. You might qualify for Social Security benefits after 2 years, but you may not be able to survive on the paltry sums you they may pay you. Your claim may be denied or delayed. (The earliest you can receive Social Security benefits for most disabling medical conditions is 2 years after your disability has started.)

For many ages and professions private long-term disability plans will be available. By paying a little bit more, you may be able to get a longer term benefit that can pay you until you reach age 65 if not longer.

Unfortunately long-term disability coverage isn’t available for all professions or for all people. Insurance companies may limit the benefit period to 2 years or 5 years for carpenters and others who are more easily disabled. They can also deny coverage based on one’s health history.

A private short-term disability insurance policy can add to your financial security. Long-term disability policies, where available, can provide a more optimal solution however.

You can protect your ability to earn an income. Not being able to work due to a medical event that is no fault of your own shouldn’t destroy your life. Take the first step and request private long-term disability insurance quotes and information from competing companies through this site.

Mortgage Insurance for Disability

Filed under: Disability Insurance — Alston @ 5:30 pm February 11, 2011

Making sure that you can pay for your mortgage even if you are too sick to work is a big part of financial security. A lifetime of savings can be wiped out in a very short time if your income stops or is reduced to the monthly payments you might get from Social Security or other government-based programs.

Although disability causes more families to lose their homes than death does, many who choose mortgage life insurance do not opt for the protection offered by mortgage disability insurance. One reason more term and other mortgage life insurance is sold is this is that life insurance is easier to qualify for and can be less expensive. (You can request mortgage insurance for disability quotes on this site.)

This price difference should be a clue that disability is more likely to happen during your working years and that you might be more likely to need the benefit of disability coverage during your working years. Although your insurance company may price a long term disability policy designed to replace a given amount of income will cost most people more than a life insurance policy designed to replace the same amount of income, disability insurance is affordable for most people.

There are several factor s that impact the premiums that you might pay to an insurance company for a mortgage disability insurance plan. One is gender. Male is better. (Sorry ladies. Don’t be mad, you get a lower rate for life insurance.) Health history including height and weight are factors. Age matters also. Younger is better. Occupation is another big factor that impacts payments. The less risky and physical your job is the less likely you are to have a claim and the cheaper your rate will be.

This means that a young healthy male accountant will get lower quotes for disability insurance than a mature female skydiver with a medical condition if they request the same monthly benefit. Fortunately, younger healthier folks can usually lock in their rate for coverage based on their current age, health history and current occupation.

Of course, you can purchase a “regular” long term disability insurance policy that covers all your needs; you don’t need to purchase a separate plan to cover you mortgage. In fact, separate policies will often cost more.

However, a policy that is tied to your employment should not be your only disability protection. If you lose your job, or start your own business, you can lose your coverage.

It is important to have enough disability insurance protection. It is also important that you have it when you need it. For this reason, your insurance should not be tied to the company you work for.

It is important to have enough long term disability insurance to cover the necessities of life. Mortgage disability insurance can help keep a roof over your head. Government programs may not be enough to help you come close to maintaining your lifestyle.

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