3 Essential Benefits of Disability Insurance

3 Essential Benefits of Disability Insurance

Disability insurance is designed to pay out benefits if you are unable to work due to an illness or injury. The average disability insurance policy will pay out approximately 60 percent of your normal income. Nonetheless, if you are young and healthy it can be tempting to think that disability insurance does not apply to you.

However, let’s discover 3 of the most common benefits of disability insurance that might just change your mind.

Get Money When You Need It Most

If you are forced to miss work due to an injury or illness, disability insurance benefits can cover your costs. Unlike life insurance, which can only be claimed by the intended recipients after you die, disability insurance benefits can be used to support you and your family on a temporary or permanent basis while you are alive. Almost everyone has financial obligations nowadays and we all rely on our income to cover living costs. Mortgages, car payments, and debts can all spin out of control if you are unable to bring home a salary.

Being unable to work can be even more stressful if you are the primary breadwinner and have a family to support. If more than one person is dependent on your salary, you need to make sure that your family would be able to enjoy the same quality of life if you were unable to work. Disability insurance benefits can provide a safeguard in this respect. Every single household has a unique financial situation and therefore your disability insurance policy and benefits can be tailored to meet your specific needs.

Disability Insurance Policies Are Transferrable

A unique advantage of disability insurance policies is that they are not usually locked into your current job. If you transfer from one role to another, your policy will remain in place. Although some jobs are naturally riskier than others and your chances of becoming disabled are higher, insurers typically use a Standard Industry Code for each occupation. This code looks at the characteristics of specific industries and can be used to determine an approximate assessment of risk.

So, if you have switched job titles due to upward mobility within a company or work lots of temporary jobs as a contractor, you need not worry about losing your insurance or suddenly having to pay higher premiums. This feature is especially useful for entrepreneurs who switch business ventures often. Just because your job changes, does not mean that your insurance coverage has to. That being said, in order to ensure that you do get an accurate disability insurance quote year after year, it is strongly recommended that you inform your insurer of any significant health, lifestyle, or career changes on a regular basis.

Protect Your Savings

Do you have savings and investments in place to secure your financial future? Do you have modest expenses? Perhaps someone else in your household or a partner is also earning an income? When applying for insurance it is important to take these factors into consideration as you might be able to adjust your policy accordingly if you can afford to lengthen your elimination period. Doing so can lower the cost of your disability insurance premiums.

However, taking out even a short term disability insurance policy can allow you to hold on to your savings for a little longer while instead drawing on your disability benefits. Although it can be difficult to determine precisely how long you might be disabled and out of work for, in many cases, your reliance on disability benefits will only be a temporary measure. It would therefore be a shame to have used your savings or another income to bridge this gap when insurance payments could have been a better option. Above all, disability insurance benefits can be used to prolong your savings.

Disability insurance is one of the main sources of financial assistance for employees that are unable to work due to temporary or long term disabilities. Moreover, by investing in disability insurance now, you can safeguard your future earnings and protect your savings regardless of where you work.

Considering purchasing more forms of insurance to protect yourself and your family? Check out this guide for some money saving tips when shopping for insurance.

Leave a Reply

Tweet
Share
Share