Title: Taking a Close Look at Disability Insurance - dummies
Headings: Taking a Close Look at Disability Insurance
Taking a Close Look at Disability Insurance
Content: and the amount you will receive will likely be less than half your income. The only way to protect yourself and your family from financial disaster is to maintain adequate disability insurance. Disability insurance replaces a portion of your income if you become ill or injured. It’s very expensive because the likelihood that you may need this benefit is relatively high. The risk isn’t something that you likely can bear yourself, so you must transfer the risk to an insurance company. Disability insurance companies won’t sell you an insurance policy to replace 100% of your income. However, they do sell policies that go up to about 70% of your current income. If you don’t have at least 70% of your current income provided through your employer’s disability insurance plan, you should obtain supplemental coverage to bring you up to 70%. If you currently need all your income to provide your standard of living and achieve your financial goals, you’re going to have trouble making ends meet if you only bring in 60% to 70% of your current income. What typically happens in real life is that people have to make drastic lifestyle changes— unless you obtain as much disability insurance as you can get.