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Disability Income Insurance Protects a Home

Posted on: Monday, February 1st, 2010

For most of us, our homes are the biggest financial investment that we will ever make; an investment that we need to protect as best we can. Throughout our lifetime there are a myriad of things that can happen that can endanger our ability to pay our mortgage, and before we know it we could be in a position where we are facing a foreclosure. When we consider the fact that most of us would be in serious financial trouble if anyone in our household were to lose their salary, then it becomes clear very quickly just how important it is to make allowances for those circumstances that we may not be able to anticipate.

Disability income insurance is a protective feature chosen by many people who want to protect their earnings should they experience an illness or injury and not be able to return to their current job. A loss of salary could be financially devastating for a family, and so policyholders put disability insurance into place so that they are not financial vulnerable if their physical (or in some cases, mental) condition causes them to have to leave work either temporarily or permanently.

Clearly the benefits of disability income insurance are numerous and most policyholders understand that by enacting a disability insurance policy they are protecting their family’s ability to continue to live their life comfortably. But beyond the ability to pay utilities, buy food, and pay for the day to day expenses that come with living a life, disability insurance allows policyholders to protect their financial investments. This protection is extended to everything from savings accounts and 401k investments to college savings and IRA accounts – anything that we would have to quickly access and ultimately deplete if we found ourselves without a salary for an extended period of time. But beyond that, disability insurance protects our largest financial investment – our home – from vulnerability.

Turning Our Back on Disability Insurance, Part II

Posted on: Monday, January 4th, 2010

In the last post I related my family’s experience when I suffered a terrible car accident and was out of work for an extended period of time. My husband and I, even with two small children, had been convinced that disability income insurance was a waste of money and that we were better off putting those policy premiums toward something else.

In the wake of my accident I had enormous physical and emotional trauma to deal with; our finances were, quite honestly, the last thing on my mind and I know my husband did his best to hide a lot of what was going on from me so that I could just concentrate on getting better. But before long it became absolutely necessary that we turn our attention to our finances as we were beginning to receive notices from bill collectors and were even starting to get preliminary foreclosure notices on our home.

With no disability insurance we had been vulnerable to my loss of a paycheck and now instead of being able to focus on the task at hand – getting better and still parenting our children, even with limited physical abilities – I was worried about having our home taken away from us in the midst of this already stressful time.

We got enormously lucky. Our family came together and helped pay the back mortgage payments as well as the other outstanding bills that had come due while I had been out of work. And just a few short months later I was back to work and earning my paycheck again. I am still undergoing physical rehabilitation but I am getting stronger everyday and we are working our way back to being financially stable. Now, just as we pay our life insurance premiums, we are paying premiums on our new disability income insurance policy that we have taken out for both me and my husband so that we may never again face that kind of vulnerability.

Turning Our Back on Disability Insurance, Part I

Posted on: Monday, December 14th, 2009

I got myself in a situation a couple of years back that I wouldn’t wish on anyone; and the fact of the matter is that I tell everyone I meet my story so that they can think long and hard about the choices they make. You never know if taking the easy (or cheaper) way out today is going to cost you tenfold in the future. That’s exactly what happened to me.

Several years ago I was just starting out in my professional career, having recently graduated from college. My education was pursued a bit later than most as I had gotten married and had two children before I went back to school and got my degree. When I was offered my job I was happy to accept it, as it was everything I was looking for professionally and offered the salary and benefits that were so important in helping to sustain my household. Of course my husband and I had thought nothing of purchasing life insurance after we were married – and even of increasing the amounts on the policies when we had the kids – but we were less inclined to purchasedisability insurance. We were managing to pay our bills with our salaries but the truth was that we just didn’t want to spend any more money on insurance; and we honestly felt like it was something that we wouldn’t need. Boy, were we wrong.

Approximately thirteen months after starting my new job I was in a terrible car accident. It was no one’s fault really; just the result of a dark, rainy night, poor visibility, and slippery roads. I broke several bones, suffered head trauma, and required months of physical therapy. My husband and I were so focused on dealing with the physical repercussions of my situation that we only turned an obligatory eye toward our finances when it became necessary.

Which it soon very much did.

In the next post, I’ll continue my story of what the decision not to purchase disability insurance meant for our family.

Sign on for Disability Insurance, Part II

Posted on: Tuesday, November 24th, 2009

In the last post we discussed some of the reasons why younger employees – just starting out in a job – may not consider life insurance or disability insurance to be something that is necessary. For such employees – often in their twenties – the thought of death is very far away in their minds; and, as far as illness or injury, they are something that surely would not happen to them.

But – as we quickly discover – both of these scenarios are inaccurate. For one, we are all going to die. And if we die while we still have young children – not to mention a spouse – who are dependent upon our income life insurance will be paramount to their financial survival. Further – as we also discover as we continue to have life experiences and see first-hand what can happen – illness and injury is not in any way confined to a particular age group. In fact, the younger we are when we experience a disability the more financially vulnerable we are; we have not had the time to build up savings accounts that may help to support us – including retirement accounts, may not have enough equity in a home to call upon, and may (as most people do in this age group) be living paycheck to paycheck. What happens when that paycheck suddenly disappears?

Disability insurance is meant to cover those who have experienced an illness or injury and are not able to return to work. This policy will just as easily cover someone who must take a short sabbatical from work as they recuperate as it does someone who finds themselves permanently disabled and unable to return to work at all. It is only a matter of finding the policy that works best for you and your family. Make the purchase of disability insurance something that you do in the beginning of your career – as one of the steps that you take in protecting your future and that of your family’s future.

Sign on for Disability Insurance, Part I

Posted on: Monday, November 23rd, 2009

Early on in our careers there are many decisions that we need to make in terms of how much money we need to take out for taxes (What number do we put in the box of dependants – this has always been a tricky one.), which health insurance is most beneficial for us (do we go barebones if we are single? Do we get a more comprehensive plan if we are married?) and how much do we put aside for retirement (Retirement? That sure seems like a long way away!)

The fact of the matter is that for most young people it is very hard to imagine anything bad happening to us. Retirement seems like a million years away, we can’t imagine getting sicker than coming down with the flu, and taxes are just something that we pay. But as we get older we find ourselves making more comprehensive plans for our healthcare as we have very quickly come to realize that we are in fact susceptible to illnesses of all kinds and beside that, we now have a family to cover; we start putting money hand over fist into our 401k plans because we have also come to discover that retirement, once a far-fetched idea, really isn’t as far off as we had thought; and, as far as those taxes, well, we hire an accountant.

Some of the other areas that may suffer from too little attention in our younger years are life insurance and disability insurance. Life insurance is often not too much of a consideration because, after all, we’re not really going to die (ahhhh, the immortality of our twenties) and disability insurance is only for those who have an illness that they think may one day prevent them from doing their job.

In the next post….we address these inaccuracies and uncover the necessity of such things as disability insurance.

Disability Insurance Plans Offer Many Options

Posted on: Tuesday, November 17th, 2009

Choosing any kind of insurance plan can be overwhelming at best; especially when you consider that most insurance is meant to help us or our family in the event of a death, illness, or injury. These are not uplifting thoughts for anyone to consider; but still they must be considered in order for us to be our most responsible selves. Is it awkward and uncomfortable to go through the process of choosing life insurance – discussing the details of our hypothetical deaths? Sure it is! But it still has to be done if we are going to be able to best protect our children and our spouses – as well as the rest of our family – in the event of our death.

The same goes for disability insurance. Should we become ill or injured – deemed disabled – and unable to return to work, how will we be able to account for that missing paycheck? For most of us who are living paycheck to paycheck and still struggling to pay our bills on time, the thought of losing that paycheck for even a short amount of time is absolutely inconceivable. In short order most of us would be facing foreclosure and even bankruptcy. Disability insurance helps protect families against these possibilities by essentially replacing the paycheck that is lost when an earner cannot return to work.

There are still many decisions to be made regarding disability insurance as there are many disability insurance plans available to suit a variety of circumstances. It is only necessary to determine what your financial needs are in the present – balanced with what your financial needs would be if you were to lose a salary – to find the disability insurance policy that is best for you and insurance policy premiums that are still affordable. By changing options such as length of time you would have to wait before the policy pays out and the length of coverage time, you can change the premium costs considerably; so do your research and choose wisely.

Disability Income Insurance with Children, Part II

Posted on: Monday, November 9th, 2009

In the last post we discussed the failure of many households to purchase disability insurance – an insurance that is just as important in many ways as life insurance.Disability income insurance will financially protect a household should the policyholder become sick or injured and not be able to earn their salary.

Let us first consider the average American household with children. In many cases – as is the way of the world today – this household is reliant upon two incomes to keep up with expenses. In fact, very few households have extra money at the end of the month to put into savings plans or use towards discretionary purchases. This means that should the household lose one income due to a disability they are vulnerable to a host of financial disasters.

Of course, most of us have vacation time and sick time that we are able to call upon from our employment. But what if the disability is such that we are not able to return to work for many, many months – or not at all? Where does this leave our household in terms of mortgage payments, utilities, debt, and the day to day expenditures associated with running a modern household?

This is the situation that many young families with children find themselves in when there is no disability insurance. They may find themselves facing foreclosure, bankruptcy, and severe financial stress on top of an already physically and emotionally stressful time.

With disability insurance in place, however, we are able to protect our families from financial disaster. Should we become disabled, our disability insurance will begin paying out so we are able to meet our financial obligations head on and make other arrangements concerning long term plans. This is absolutely priceless protection for those who have children as they do not have to face moving homes, changing schools, and the other repercussions of losing an income during an already difficult time.

Disability Income Insurance with Children, Part I

Posted on: Wednesday, November 4th, 2009

There are certain things that we, as parents, do when we have children. After all, our lives have changed considerably and now we are responsible for lives other than our own. We may move our residence to somewhere safer or to an area that has better schools; we research those activities and day care situations in which we may enroll our kids and look at them from all angles to ensure that they are appropriate for our kids and will ultimately meet their needs, and we set about making financial choices that will protect our children in a variety of circumstances – including savings accounts, college funds, and life insurance.

Life insurance is especially important, we consider, because this will financially cover our kids should we die while they are still dependent upon us. We carefully choose guardians for our children and make sure that the life insurance money is guarded and carefully administered by a trusted executor. But we seldom – unfortunately – give the same thought to what would happen to our children if we were still here but unable to provide for them financially; a predicament that many families find themselves in when they are without disability insurance.

Disability income insurance is provided to protect its policyholders in the event of an accident or injury that leaves them disabled and unable to return to work for a particular period of time (that period which is defined by the policy). Households that are dependent upon their incomes – and less face it, who isn’t – must look to protect their interests if they were to lose one or multiple incomes. Disability income insurance accounts for this loss and pays out to the policyholder the money that will keep their household afloat during this difficult time.

In the next post, we’ll delver further into how disability insurance can protect families with children.

Business Owners & Disability Insurance

Posted on: Monday, October 26th, 2009

Those who own their own business are in the unique position of having to provide for themselves in a way that an employer would normally provide for an employee. This can be a tough transition to make – especially for someone who has become accustomed to working for larger corporations in which all benefits were provided along with a competitive salary. Being a business owner means taking care of your employees and providing those same benefits as a part of their compensation package; but it also means making sure that you and your family are covered in all scenarios. This is especially true for those smaller businesses, or perhaps an at-home business that is essentially a one-man show. Under such circumstances it can be difficult for a business owner to remember to take care of themselves as they are often more concerned with putting money back into the business.

Disability insurance is one area that can be overlooked in terms of seeking out coverage; but it is among one of the most important benefits that business owners should remember to provide for themselves – right up there with life insurance and health insurance. Disability insurance plans are put in place so that those who become ill or injured and are not able to continue working are provided with a “salary” of sorts. The amount of the policy and the terms attached to it – as far as length of coverage, time period that the policyholder must wait before benefits are paid, and the definitions applied to disability – are all defined by the different policies that can be chosen. It is up to the business owner to choose the disability insurance policy most suited to their needs. It is not so much important what policy they chose as that they chose one at all. Business owners need to treat themselves the way that they would treat their employees.

Disability Insurance After a Car Accident, Part 1

Posted on: Monday, October 26th, 2009

Car accidents are certainly not expected events. We may head out in the morning as usual and everything will be going along smoothly until a mistake on the road – or something completely out of anyone’s control – causes a series of events could very well alter someone’s life.

Certainly no one anticipates such an event but as responsible people we prepare for the possibility of something like this happening – so that we are financially and physically protected. Car insurance is something that is required but law but it is also something that insulates us and our families from the financial ramifications of a vehicular accident, regardless of who is to blame.

But far too few of us take the next steps in protecting our families from the possibilities of long term consequences of a car accident. The fact of the matter is that over one-hundred people are killed each and every day on U.S. roadways; our busy lives and crowded highways have exacerbated an already significant problem.

The best that we can do in order to avoid injury or death in a vehicular accident of our own is to take control of our own driving and be on the defensive as much as possible against other drivers who could cause us harm. Observing the rules of the road is important in order to protect our own safety and the safety of other drivers. But there are other steps that we can take in order to protect ourselves financially if we do sustain injuries – including disability insurance.

Disability income insurance is a provision put into place for those who may find themselves out of work due to an illness or injury. Disability insurance plans are available to run the gamut of possibilities including a short term absence from work, a gap policy that covers a waiting period that may be built into company-sponsoreddisability insurance plans, or longer term policies that cover policyholders who are permanently disengaged from their jobs because of a sustained illness or injury.