Life Insurance and Personal Protection Strategies

Personal Disability Insurance

One of the most important coverages to consider is personal disability insurance. Although life insurance coverage is more well known, many people do not realize that the result of losing one’s ability to earn a living due to a personal disability can have far reaching effects. Without your ability to earn a living, you will be hard pressed to cover the costs of everything else in your life. It is important to consider having a disability insurance policy that protects your income should you become disabled due to an accident, injury, or chronic illness.

It is especially important to procure the right type of policy which is suitable for your needs. It is important to obtain a policy where the company cannot cancel coverage, where premiums cannot be increased, and where the coverage for disability is tailored to your own occupation. Some policies will only pay benefits if you are unable to perform the duties of any occupation while other policies will pay benefits if you are unable to perform the main duties of your own occupation, the latter of course being preferable. Typically, disability benefits paid will approximate 60% of your earned income as averaged to the most recent two to three years inclusive of the year of your application. It is also important to obtain coverage from a company that has a history of meeting its long-term financial obligations with a track record of financial strength and strong credit ratings. Most good disability policies will offer non-cancelable coverage to age 65 as long as you pay your annual premiums. Often there are optional coverages and riders that may allow you to customize certain features. For example, optional partial disability benefit riders are designed to pay a benefit if you continue to work, but as a result of a sickness or injury, you can no longer fully maintain your usual work schedule and suffer a partial loss of income. Other options may include the ability to increase your disability benefit (prior to a disability claim) in order to align your benefits more closely with increases in your salary as time goes on.

Please feel free to consult with us regarding this most important coverage.