Questions About Disability Insurance? We Have Answers

Disability insurance is one of the most misunderstood insurance policies in people’s financial portfolios. It’s normal to have a “it only happens to the other guy” mentality. However, when it comes to being disabled, studies show there is a 20% chance in a professional career that a worker will suffer from some kind of disabling injury that will last longer than a year.

This lack of understanding about disability insurance gives rise to many questions. Here are some of the more common questions people have.

Do I Need Disability Insurance? I have SSDI
SSDI, Social Security Disability Insurance, should not be relied upon as your primary disability insurance. First, the insurance is for long-term use only and does not help you if your disability will be less than 7 months. Second, by Social Security’s own estimate, disability payments at the best will keep you at a level slightly above poverty. The average payout is $1234 a month.
What’s the difference between short-term and long-term disability?

Short term disability covers disabilities lasting from three to six months long. This insurance is usually provided by employers for their employees, so they can recover from a workplace injury after they’ve exhausted their sick leave.

Long term disability is for injuries lasting longer than six months. It’s coverage will last the term of the policy, sometimes up to a lifetime. Private disability coverage will also pay out faster than a government program in most cases.

How much disability insurance do I need?
Most disability policies will cover you for 60% of your pre-tax salary. That is the standard for most companies. However, this can be adjusted within each policy. Every case is different, so before your price policies it’s best to speak with an insurance professional.

Will I need to get a medical exam?
Yes, you will need to go in for a medical exam. The insurance company wants to know about any current medical conditions you have, any recurring injuries you suffer from, and also about your medical history. A medical exam is a normal step in the application process.

How are my insurance rates determined?
Your disability insurance rates are determined by a variety of factors. They are:

• your age
• your current health in your health history
• your current occupation, and the tasks that you perform in that occupation
• where you live and work
• the amount of coverage you will need, based on your salary

These are only a sample of the questions we receive every day from people who are interested in disability coverage. We can’t stress enough the importance of having a layer of protection to replace any loss of income in the event you are temporarily or permanently disabled.

At Flagler Financial, we work with people every day to help them build a base of support and safety for their family with quality insurance products. We have helped a variety of people from many different professions and circumstances, and we understand obstacles like budgets and finances. If you have any questions about any type of insurance, we encourage you to contact us.