Disability - The Risk Of Least Concern By Martin Braddock
When you are disabled (10) things happen.
When you are disabled (10) things happen. 1) Income drops. 2) Could experience difficulty adjusting 3) Activities with the kid change. 4) Special equipment needed. 5) Household chores transferred to a family member. 6) Spouse has one more kid and no help. 7) Reduced companionship with spouse. 8) Family confined closer to home. 9) Worry about what is going to happen long term. 10) Difficulty borrowing money.
What happens to my saving plan and the budget if I get hurt in a car accident and can't work for 6 months? I suppose that will probably not happen. My wife can get a job and we'll make it somehow.
Disability is an area of risk management the is of least concern but when it happens, pays for everything including savings. Are your kid not going to college, will you have to retire, can your car last longer, and do you have enough income?
The (1st ) source of income if the injury is job related to file with your employer to see if you qualify for benefits under workman's compensation. This will provide medical assistance and some income.
The (2nd) place is to see if you are enrolled in the employers group short term disability plan. The premium would be deduct from your pay check and would usually provide benefits for up to six months.
The (3rd) place is do you have long term group disability with your company. The would provide coverage from 6 month to 2 years in most cases. This would be 45%-60% of your salary and would be taxable income.
The (4th) place is to file for benefits from social security. To qualify you cannot do work that you did before and that you can not adjust to other work because of your medical condition. Your disability must be expected to last one year or to result in death. In addition, you have to qualify by being in the system for the required number of quarters.
The (5th) place is you own personal disability policy.
Disability Insurance is classified by work performed.
1) White Collar
Professionals-for example doctors, lawyers, teachers, business executives, and clergy. Disability coverage is available with a monthly benefit equal to 45% to 60% of income from your occupation. The benefit amount can be either all base or base plus (S)upplementary (S)ocial (I)nsurance from the Social Security System for persons under age 65 when qualifications are met. Several riders are offered to enhance the coverage, several waiting periods and different elimination period can be selected.
2) Blue Collar
This coverage for persons who work with their hands. Do to the increase risk of disability the programs offered are limited and premium amounts are a concern. Your are classified by the job performed that has the lowest classification. If you are a farmer and just supervise you business, this would is one rating. When the farming is done by you, ihis would have a lower classification. Benefit period would be limited to 2-5 years and may have a limit payment amount. This coverage is hard to get enough coverage to meet your income needs.
3) Business Overhead
If you own a business, coverage to pay overhead expenses is vailable. Your expenses are listed as to the monthly amount and are paid by the insurance coverage.
Disability insurance is underwritten as to the health of the person covered. Age, sex, smoker/non-smoker, job classification, benefit period, and waiting period, are evaluated to determined premium or decline of coverage.
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