Your paycheck is very important! Your family depends on it in order to pay bills, buy groceries, and have a comfortable life. If you, or your spouse, suddenly became unable to work, how would your family survive? One thing that can help is disability income insurance coverage.
Did you know that May is Disability Insurance Awareness Month? Now is a good time to learn more about a type of insurance that many people know very little about. There are two types of disability insurance. One comes from the federal government, and the other is something that you can purchase through your employer.
The federal government has Social Security Disability Insurance benefits. This is a program that provides financial assistance to people who are disabled. You must apply for this type of insurance and wait to see if you are approved. In other words, you cannot go purchase it from a private insurance company.
The other type of disability insurance is one that you can purchase. Your employer might offer this type of disability insurance to you as part of your employee benefits. It will replace some of your income if you are unable to work due to a serious illness or injury. You can get short-term disability coverage or long-term disability coverage. This is not the same thing as workman’s compensation.
According to the Social Security Administration, more than one in four 20 year olds will become disabled at some point in their lives before they reach retirement. The Social Security Administration also says that 50% of working Americans will suffer financial issues within a month after they lose their paycheck.
This is when disability insurance can help you. It essentially replaces some of your income after you have become unable to work due to an accident or a sickness. It can replace anywhere between 40% to 60% of your paycheck. It isn’t going to give you the entire amount that you earned before you became disabled. Even so, it is much better than to be completely without any income at all.
Find out if your employer offers disability insurance coverage. Find out if they offer long-term or short-term disability insurance. Ask about the benefit period. It will let you know the length of time that you need to be disabled before you start receiving payments. Find out the benefit period, because this will tell you how long the disability insurance benefits will last.
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