The right coverage can help reduce the burden of care and safeguard your financial assets
Many employers and organizations will provide some form of group disability protection, whether it be short or long term through a group plan. This coverage can be very reasonable and should be explored if you have it available. Typically, long term plans will provide coverage up to 60% of your salary, and may offer the option to buy additional coverage up to 80% at a reasonable cost.
Social Security may also provide disability benefits, but the stark reality is the benefit amount is barely enough to support a family and keep a beneficiary above the poverty level. In 2015, the disability benefit was $1,165 per month. And to qualify for benefits, you must meet the Social Security Act’s definition of disability, which is significantly stricter than other forms of disability benefits.
You can also purchase private or individual disability insurance on your own. These plans tend to be expensive, but they do provide some advantages. To start, if you become disabled the benefits you receive will be income tax free, as long as you paid the premiums for the policy with after tax dollars. Secondly, if you have a high skill set, you want a disability policy that will pay you until you are able to perform the specific duties of your specialty. This is known as an “own occupation” policy, and is generally not available in group policies.
Please contact us to find out which coverage makes sense for your situation.