Individual Disability Insurance:

Disability Insurance may be the single most important piece 

of protection an individual can have!

The probability is that an individual is far more likely to become disabled for an extended period of time rather than die. Because of modern medicine, the diseases that used to kill people now disable us. For the most part, if a person is disabled for six months, the probability is that the person will be disabled for 4-5 years or longer.

Disability insurance replaces your income should you become disabled and unable to work. Many people have some form of disability insurance through their employer. The employers� policy may not be just what your need. In this case, you will probably want to supplement the employer’s policy with an individual policy of your own. Generally, there is a period of time (elimination period- Example:   60 days) you must be disabled before you can begin collecting disability payments from the insurance company. This period may vary.

The premiums for a disability policy are based on age, sex, occupation, and income. Insurance companies will allow an individual to take out a policy covering anywhere from about 50% to 70% of the lost monthly income. Also. if your employer pays your disability insurance, you pay tax on that income. If you pay for the disability insurance yourself, the disability income is tax-free.

Most of the time, insurance companies either consider you good enough to work or not good enough. You’re either disabled or not disabled. The insured can add on what’s called a Residual Rider. It may add about 20% to the cost of the policy; however, it will allow you to return to work part time, collect part of your salary, and receive a partial disability payment.

Always consider a policy, which is ‘Guaranteed Renewable’. Otherwise, the insurance company can cancel the policy. If it is guaranteed renewable, the only reason for cancellation is non-payment of the premium. Also, try to get a policy that is ‘noncancelable’. This means that the premium rate stated on the policy can never be raised.