Is your income insured?
You insure other less valuable assets like your automobiles and home. Why would you not protect your most valuable asset - your ability to earn an income. If you or your spouse become sick or hurt, how would you pay your bills? Could you maintain your current standard of living without jeopardizing your financial future? Nearly half of all bankruptcies are due to a disabling medical condition, although the majority of these people had adequate health insurance.
Disability insurance protects your income when you become sick or injured, allowing you time to recover without worrying over finances. Disability insurance provides a monthly benefit for loss of income because of covered injuries or illnesses. After a predetermined time period, it typically pays a percentage of your income for as long as you're disabled, under your contract.
There are two major types of disability coverage:
- Short-Term Disability
Short term disability provides an income for the first part of a disability. While the conditions of policies will vary, typically short-term disability pays benefits for two weeks up to one year.
- Long-Term Disability
Long term disability helps replace income for an extended period of time, usually ending after five years or when the disabled person turns 65. There are two major types of individual long-term disability insurance: noncancelable and guaranteed renewable. In the case of non-cancelable or guaranteed renewable policies, the insurer cannot cancel or refuse to renew the policy as long as the required premiums are paid on time. The key difference between the two major types of policies is that under a non-cancelable contract, you have extra security that premiums can never be raised above those shown in the policy as long as the required premiums are paid. With a guaranteed renewable policy, the premiums can be raised, but only if the change affects an entire class of policyholders.
Another type of insurance to consider is Long Term Health Care Insurance. With advances in modern medicine and changing lifestyles, the number of people over the age of 65 is projected to double by the year 2050. As this growing segment ages, over 40% of them will enter a nursing home for Long Term Care after age 65. Long Term Care Insurance protects the insured as well as their families in the event that extended health care is needed and can provide coverage for:
- Daily activities such as bathing, eating, dressing
- Skilled nursing care or rehabilitation training either in a nursing facility or at home
- Cognitive impairment such as Alzheimer's and deals with care-oriented conditions, not cure oriented.
Call The Michael Gasses Agency today to learn more about how to protect your family's finances against illness or injury.