Early on in our careers there are many decisions that we need to make in terms of how much money we need to take out for taxes (What number do we put in the box of dependants – this has always been a tricky one.), which health insurance is most beneficial for us (do we go barebones if we are single? Do we get a more comprehensive plan if we are married?) and how much do we put aside for retirement (Retirement? That sure seems like a long way away!)
The fact of the matter is that for most young people it is very hard to imagine anything bad happening to us. Retirement seems like a million years away, we can’t imagine getting sicker than coming down with the flu, and taxes are just something that we pay. But as we get older we find ourselves making more comprehensive plans for our healthcare as we have very quickly come to realize that we are in fact susceptible to illnesses of all kinds and beside that, we now have a family to cover; we start putting money hand over fist into our 401k plans because we have also come to discover that retirement, once a far-fetched idea, really isn’t as far off as we had thought; and, as far as those taxes, well, we hire an accountant.
Some of the other areas that may suffer from too little attention in our younger years are life insurance and disability insurance. Life insurance is often not too much of a consideration because, after all, we’re not really going to die (ahhhh, the immortality of our twenties) and disability insurance is only for those who have an illness that they think may one day prevent them from doing their job.
In the next post….we address these inaccuracies and uncover the necessity of such things as disability insurance.
Popularity: 22% [?]
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Our paychecks are meant to do a lot of things for us. They of course are meant to pay our bills and household expenses. And, for the financially savvy among us, that paycheck should also be used to put a portion of money away for the future. Savings are very important if we are to be able to do what we need and want to do throughout our lifetime. What we have earned is meant to protect us now and in the future. But unexpected circumstances can often change our lives, and along with it, the financial cushion we have worked so hard to accumulate.
Those who are hurt or become ill and are not protected by a comprehensive disability insurance policy are vulnerable to losing everything they have and everything they have worked so hard for throughout their careers. Disability insurance is meant to give us an intermediary or replacement salary if we find that we are unable to return to our jobs due to illness or injury. But it is also a protective measure in safeguarding our financial nest egg – our savings accounts, our investments, even our homes.
If any of us were to become sick or injured and be unable to work, how long would we be able to keep our household afloat without our steady paycheck? For most of us the answer is not very long. And even if we were able to survive, at the end we may find that we are without all of the earnings that we worked so diligently to put away for our futures.
But with a disability income insurance plan in place we are protecting our families now; should we be out of work either temporarily or permanently, disability income insurance will help us meet our financial obligations. Additionally, disability insurance allows us to protect our financial future by keeping our earnings intact.
Popularity: 27% [?]
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In the last post we discussed some of the reasons why disability insurance is so very important for anyone who wishes to protect their family and their finances in the event that they are hurt or become ill and are not able to return to work. For most American families the loss of a paycheck can be most devastating and, in fact, they would not survive for very long without it. Before long, savings accounts, investment accounts, and even the equity in a home may have to be accessed in order for a family without disability insurance to make ends meet.
However, with the creation of solid disability insurance plans, a family can feel secure that they are protected no matter what their circumstances. Should a household earner become ill or suffer an injury that causes them to be out of work for a period of time – or permanently – disability insurance will become engaged and policyholders will begin to receive payments so that they are able to keep afloat during an already difficult time.
Creating appropriate disability insurance plans, therefore, comes down to really examining your household expenses and what it takes for your home to manage on a monthly basis. It is important to take into account every expenditure you make month to month – from gas (and this is an expenditure that is currently on the rise) and food to mortgage payments and repayment of debt. It is important to understand what the loss of a paycheck would mean to the payment of these necessities and how else a family would survive without a disability insurance policy in place.
By examining all of these expenditures a would-be policy holder can choose the policy that works best for them in terms of payout versus affordability of premiums. An additional feature that must be chosen is how long the wait time is before the policy will pay out; if your family has savings that they can rely upon for a short period of time – without depleting the entire savings – then you can choose a longer wait time and therefore reduce your premiums. If, however, you have no backup financial options you may want to choose a disability insurance policy with the shortest wait time in policy payouts.
Popularity: 30% [?]
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Insurance is something that is simply a necessary part of life; a necessary part for those who want to ensure that their family and their finances are protected in the face of possible problems. Life insurance is purchased in order to ensure that families are protected in case of death and health insurance is purchased in order to ensure that our finances are protected when there is a need for medical care. When you consider how much medical care of any kind costs and how much of an impact it can have on our wallets, it becomes very clear how important health insurance is the grand scheme of things. After all, how many of us can afford to come out of pocket with the thousands and thousands of dollars associated with an average hospital stay?
Disability insurance is another necessity, especially if a family is completely reliant on an earner’s paycheck; and really, who isn’t in this day and age? In fact, most of us are living paycheck to paycheck in this struggling economy and it’s becoming more and more difficult to make any sort of headway. Those of us who are lucky enough to have built up some savings certainly don’t want to see that nest egg squandered in the face of a disability. But that is exactly what happens to those who do not have any disability insurance to protect their families. In such situations, an earner who is hurt or becomes ill and is not able to return to work will find that they have precious little to rely upon. Very quickly, savings accounts are diminished, investments are accessed, and even homes are sold – all in an effort to keep up with the day to day expenses that are faced by the average person in today’s society.
Examining comprehensive disability insurance plans, however, allows consumers to maximize the protection provided for their families, so that – no matter what the circumstances – family members will be okay.
In the next post, we’ll discuss some of the ways in which consumers can create solid disability insurance plans.
Popularity: 29% [?]
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In the last post we discussed the failure of many households to purchase disability insurance – an insurance that is just as important in many ways as life insurance. Disability income insurance will financially protect a household should the policyholder become sick or injured and not be able to earn their salary.
Let us first consider the average American household with children. In many cases – as is the way of the world today – this household is reliant upon two incomes to keep up with expenses. In fact, very few households have extra money at the end of the month to put into savings plans or use towards discretionary purchases. This means that should the household lose one income due to a disability they are vulnerable to a host of financial disasters.
Of course, most of us have vacation time and sick time that we are able to call upon from our employment. But what if the disability is such that we are not able to return to work for many, many months – or not at all? Where does this leave our household in terms of mortgage payments, utilities, debt, and the day to day expenditures associated with running a modern household?
This is the situation that many young families with children find themselves in when there is no disability insurance. They may find themselves facing foreclosure, bankruptcy, and severe financial stress on top of an already physically and emotionally stressful time.
With disability insurance in place, however, we are able to protect our families from financial disaster. Should we become disabled, our disability insurance will begin paying out so we are able to meet our financial obligations head on and make other arrangements concerning long term plans. This is absolutely priceless protection for those who have children as they do not have to face moving homes, changing schools, and the other repercussions of losing an income during an already difficult time.
Popularity: 43% [?]
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There are certain things that we, as parents, do when we have children. After all, our lives have changed considerably and now we are responsible for lives other than our own. We may move our residence to somewhere safer or to an area that has better schools; we research those activities and day care situations in which we may enroll our kids and look at them from all angles to ensure that they are appropriate for our kids and will ultimately meet their needs, and we set about making financial choices that will protect our children in a variety of circumstances – including savings accounts, college funds, and life insurance.
Life insurance is especially important, we consider, because this will financially cover our kids should we die while they are still dependent upon us. We carefully choose guardians for our children and make sure that the life insurance money is guarded and carefully administered by a trusted executor. But we seldom – unfortunately – give the same thought to what would happen to our children if we were still here but unable to provide for them financially; a predicament that many families find themselves in when they are without disability insurance.
Disability income insurance is provided to protect its policyholders in the event of an accident or injury that leaves them disabled and unable to return to work for a particular period of time (that period which is defined by the policy). Households that are dependent upon their incomes – and less face it, who isn’t – must look to protect their interests if they were to lose one or multiple incomes. Disability income insurance accounts for this loss and pays out to the policyholder the money that will keep their household afloat during this difficult time.
In the next post, we’ll delver further into how disability insurance can protect families with children.
Popularity: 22% [?]
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In the last post I related my family’s experience when I suffered a terrible car accident and was out of work for an extended period of time. My husband and I, even with two small children, had been convinced that disability income insurance was a waste of money and that we were better off putting those policy premiums toward something else.
In the wake of my accident I had enormous physical and emotional trauma to deal with; our finances were, quite honestly, the last thing on my mind and I know my husband did his best to hide a lot of what was going on from me so that I could just concentrate on getting better. But before long it became absolutely necessary that we turn our attention to our finances as we were beginning to receive notices from bill collectors and were even starting to get preliminary foreclosure notices on our home.
With no disability insurance we had been vulnerable to my loss of a paycheck and now instead of being able to focus on the task at hand – getting better and still parenting our children, even with limited physical abilities – I was worried about having our home taken away from us in the midst of this already stressful time.
We got enormously lucky. Our family came together and helped pay the back mortgage payments as well as the other outstanding bills that had come due while I had been out of work. And just a few short months later I was back to work and earning my paycheck again. I am still undergoing physical rehabilitation but I am getting stronger everyday and we are working our way back to being financially stable. Now, just as we pay our life insurance premiums, we are paying premiums on our new disability income insurance policy that we have taken out for both me and my husband so that we may never again face that kind of vulnerability.
Popularity: 27% [?]
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I got myself in a situation a couple of years back that I wouldn’t wish on anyone; and the fact of the matter is that I tell everyone I meet my story so that they can think long and hard about the choices they make. You never know if taking the easy (or cheaper) way out today is going to cost you tenfold in the future. That’s exactly what happened to me.
Several years ago I was just starting out in my professional career, having recently graduated from college. My education was pursued a bit later than most as I had gotten married and had two children before I went back to school and got my degree. When I was offered my job I was happy to accept it, as it was everything I was looking for professionally and offered the salary and benefits that were so important in helping to sustain my household. Of course my husband and I had thought nothing of purchasing life insurance after we were married – and even of increasing the amounts on the policies when we had the kids – but we were less inclined to purchase disability insurance. We were managing to pay our bills with our salaries but the truth was that we just didn’t want to spend any more money on insurance; and we honestly felt like it was something that we wouldn’t need. Boy, were we wrong.
Approximately thirteen months after starting my new job I was in a terrible car accident. It was no one’s fault really; just the result of a dark, rainy night, poor visibility, and slippery roads. I broke several bones, suffered head trauma, and required months of physical therapy. My husband and I were so focused on dealing with the physical repercussions of my situation that we only turned an obligatory eye toward our finances when it became necessary.
Which it soon very much did.
In the next post, I’ll continue my story of what the decision not to purchase disability insurance meant for our family.
Popularity: 18% [?]
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In the last post we discussed the importance of disability income insurance, as well as the importance of shopping for such insurance by comparing similar elements. First and foremost, it is essential that potential policyholders ensure that they are working with a company that is reputable and has a solid reputation in the industry. From there, potential policyholders can examine the offerings by each of the companies in question and ask the appropriate questions such as the definition of a disability according to the terms of the policy, the length of time the policyholder may have to wait before they are able to receive benefits, and the need for medical exams going forward.
Some of the other things to consider when examining disability insurance include:
* The length of the policy in question. Not every disability insurance policy is the same; the terms are different from one policy to the next. You may be interested – or only able to afford – a shorter term policy; or you may be interested in a long term disability insurance policy that will cover you up until the age of traditional retirement. Make sure you are comparing similar policies when you are comparing prices.
* The amount received should the policy go into effect. If a disability does arise and you are forced to enact your policy, you need to know how much you will be receiving. Every disability insurance plan is different; be sure you understand all the details of what you are getting under your plan. It doesn’t make sense to purchase a policy for which you cannot afford to pay the premiums; the trick is finding a balance where you have the appropriate amount of affordable insurance.
* What, if any, are the exclusions of the policy. Some disability insurance policies come with exclusions written into the plan that may affect the amount you receive or for what you will be covered. Take the time to get to know your disability insurance plan intimately so that you know what could affect your ability to make a claim.
Popularity: 27% [?]
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Applying for insurance of any kind requires research on the part of the applicant, in order for them to make the most informed decision possible. After all, not every insurance policy is the same as the next; when choosing between policies – especially those that pertain to our health, such as with health insurance and disability insurance – we need to make sure that we are comparing apples with apples. While one policy may have higher premiums, such premiums may afford us more comprehensive coverage in specific areas, so we need to know exactly what we are comparing.
With disability income insurance, there are specific things that potential policyholders should consider when comparing and contrasting policies including:
* The reputation and experience of the disability insurance company with which we are considering working. Any insurance agency that a consumer considers should have a healthy – and longstanding – reputation in the industry, as well as strong financial backing.
* The way in which the company defines a disability in its policies. Your idea of a disability may be a stark contrast to what is defined as a disability through a particular carrier. Be sure you know the particulars of what will qualify you to receive your disability insurance benefits.
* Whether the company requires a medical exam in order to be qualified for coverage; and whether ongoing medical examinations are required in order to maintain or renew the policy.
* The amount of coverage that you can afford in terms of premium payments today. In other words, how much coverage does your disability insurance premium payments afford you in terms of benefits?
* The wait time for benefits to being released. There are different wait times associated with different types of policies following the validation of a disability; be sure you know what you are facing under these circumstances.
Popularity: 25% [?]
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