Disability Insurance
Your biggest asset is your ability to earn an income. Disability Insurance is a living benefit that provides you with continued income if you become unable to work due to illness or injury.
All disability insurance benefits are paid out tax-free. Disability insurance is highly tailorable with many options to develop a comprehensive plan for any occupation.
Statistics show that prior to age 67, the chances of being disabled for three months or more are significant. What are your chances of becoming disabled for a period of more than 90 days before you reach the age of 67?
There are many options for customizing a disability insurance policy. There insured chooses the plan design that fits their need and there are various riders that can be added to a policy to develop comprehensive coverage.
Choosing a Plan Design
The amount of coverage is based on a percentage of your earnings (i.e. you cannot insure what you do not have). Benefits are always paid out tax free.
Waiting Period: the number of days from the date you are disabled until the benefit start date, typically 30, 60, 90, or 120 days. The longer a person can wait (self-insure) reduces the insurance cost.
Benefit Period: the length of time a benefit is paid while disabled. This period varies from 2 years of coverage, to the age of 65 depending on your occupation, budget and need.
Choosing a Plan Design
Own Occupation: pays a benefit if you are unable to perform the duties of your regular job for which you are highly trained or skilled due to an illness or injury. Own Occupation allows you to earn a tax free benefit even if you are still gainfully employable. For example, a surgeon loses the use of his or her hand and is no longer able to work as a surgeon. He or she would continue to collect a disability benefit even if they became employed somewhere else.
Residual Disability: pays a benefit if you are not totally disabled. You will be considered residually disabled if you are not totally disabled and are working full or part0time in any gainful occupation but due to injury or sickness, you are unable to earn more than 80% of your prior earned income.
Return of Premium: this benefit provides for the return of up to 50% of the yearly eligible paid premium if you are not disabled and your claims have been minimal.
Future Insurability Option: On each policy anniversary, if you are not disabled, you may apply for additional disability insurance coverage, without providing medical evidence.
Cost of Living: during your disability, your monthly benefit will be adjusted annually based on the percentage change in the consumer price index